Tencent to Ramp Up AI Infrastructure Spending in H2 2026 as Domestic Chip Shipments Rise

Tencent said on its May earnings call that it expects to invest “much more” in AI infrastructure in the second half of 2026, citing improving shipments of domestically made AI chips that it expects to increase “month by month through the year.” Chief Strategy Officer James Mitchell made the comment during the company’s May earnings discussion with investors. That spending decision matters because it will shape how quickly Tencent can scale AI models and compete with large domestic and international peers.

The company reported 9 percent revenue growth in the first quarter, with revenue reaching 196.5 billion yuan, and net profit rising 21 percent. Tencent is also in talks to acquire a stake in Deepseek. At the same time, a parallel push by a major domestic rival plans more than $30 billion in AI infrastructure spending, and new Chinese rules requiring domestic firms to buy locally made AI hardware are adding immediate demand pressure on local suppliers.

Those hopes for cheaper, steadily growing local chip supplies sit alongside separate reporting that highlights persistent shortages of key components — including chips, circuit boards and optical parts — which analysts say are unlikely to clear quickly. If suppliers cannot scale to meet the increased demand, Tencent’s planned spending could stall or drive up hardware prices, complicating efforts to scale AI systems. The ability of suppliers to expand output will be decisive for deployment timelines and for how Tencent and its peers stack up against larger U.S. technology firms with bigger overall AI‑infrastructure budgets.