Tencent registered double-digit profit and revenue growth in Q3, fuelled by an increase in gaming and continued gains in online advertising, as it insisted its compute resources can keep its AI offering competitive.

In its earnings call, president Martin Lau stated its GPU resources are “sufficient for internal use”, with improvements in its Hunyuan model and resources ongoing.

“Tencent is not behind in AI capabilities, with continuous enhancements expected to maintain competitiveness,” the executive added.

Hunyuan is the company’s AI framework designed to power large language models and multimodal systems.

Lau did acknowledge a chip shortage, however, is slowing growth in its cloud business.

Chair and CEO Pony Ma highlighted strategic AI investments have improved ad targeting, game engagement and efficiency in coding.

Net profit in the quarter grew 18 per cent year-on-year to CNY70.6 billion ($9.9 billion), with revenue increasing 15 per cent to CNY192.9 billion.

International games revenue surged 43 per cent to CNY20.8 billion, while domestic games rose 15 per cent to CNY42.8 billion. Social networks revenue was up 5 per cent to CNY32.3 billion. All three are part of Tencent’s value-added services unit, which grew 16 per cent to CNY95.9 billion.

Marketing services improved 21 per cent to CNY36.2 billion. Fintech and business services, which includes its cloud unit, increased 10 per cent to CNY58.2 billion despite supply constraints in sourcing GPUs, Tencent said.

Combined monthly active users (MAUs) of messaging service WeChat and Chinese version Weixin inched up 2 per cent to 1.4 billion. MAUs on its QQ mobile messaging platform again fell, down 8 per cent to 517 million.

R&D expenses increased 28 per cent to CNY22.8 billion; capex was up 24 per cent to CNY15 billion.