Tencent buys 5% Tesla stake in AI drive

Updated 2017-03-30 10:01:26 China Daily

Tencent Holdings Ltd's investment in electric car maker Tesla Inc, announced on Tuesday, highlights the internet giant's strategic focus in artificial intelligence-backed applications, notably in the realm of smart vehicles, experts have said.

The Chinese internet conglomerate scooped up 5 percent of Tesla's shares for around .78 billion to become its fifth-largest shareholder, according to a filing to the United States Securities and Exchange Commission.

Tencent is bullish on Tesla's new technologies, “including electric cars, assisted driving and shared vehicles”, according to a company statement to China Daily on Wednesday.

The company said its success is partly due to its record of providing capital backing for entrepreneurs, and that Tesla CEO Elon Musk is the archetype for such entrepreneurship.

The move comes alongside Tesla raising .4 billion in a separate offering of stock and debt, increasing its liquidity to mass produce its new, cheaper Model 3 sedan.

“We share Tesla's vision in creating a better future for the planet, and look forward to working together as a supportive shareholder,” Martin Lau, a vice-president at Tencent, said in a tweet on Wednesday.

The news sent Tencent shares up 0.885 percent to HK8 (.34) in Hong Kong on Wednesday. Tesla's share price was boosted 2.7 percent in New York a day earlier.

The deal comes after Tencent, a prolific investor in gaming and social networks, expands its presence in the transportation sector. It has invested in China's largest ride-sharing startup Didi Chuxing, and Shanghai-based electric car developer NextEV.

Tesla and Tencent are likely to work in the development and deployment of technologies in new modes of transportation, from infotainment to autonomous driving, said Lu Zhenwang, head of Shanghai-based Wanqing Consultancy.

Tencent has also stepped up its own AI efforts, setting up a related research lab last year. Its current prowess in the area is exemplified by a championship this month in the strategic game Go, which Google Inc made its mark on when its AI AlphaGo triumphed over world champion Lee See-dol last year.

“The transportation sector is perhaps the first application area to turn AI technologies into tangible products and services,” said Zhang Yun, an analyst at iResearch Consulting Group.

He said Chinese internet giants, including Baidu Inc, Tencent and Alibaba Group Holding Ltd, are investing billions of dollars in autonomous driving.

Alibaba said on Wednesday it would upgrade its machine-learning platform to focus and better empower innovation in the life science and manufacturing sectors.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58January 24 2018 04:08:30

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16January 24 2018 04:08:30

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18January 24 2018 04:08:30

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords