Tencent to invest $70 billion in 'new infrastructure'

Chinese tech giant Tencent Holdings will invest $70 billion over the next five years in technology infrastructure including cloud computing, artificial intelligence and cybersecurity, the company said Tuesday.

The announcement comes after call by Beijing last month for a tech-driven structural upgrade of the world's second-largest economy through investment in "new infrastructure" and a boom in demand for business software and cloud services.

Other key sectors of the investment include blockchain, servers, big data centres, supercomputer centres, internet of things operating systems, 5G networks and quantum computing, Dowson Tong, senior executive vice president of Tencent, told state media in an interview.

Tencent is best-known for its WeChat messaging app and a range of popular games but is aiming to expand into business services as consumer internet growth slows and companies shift number-crunching from their own computers to the cloud.

Tencent shares were 2.5% higher following the announcement.

Tencent has said while cloud businesses suffered amid the Covid-19 outbreak it expected to see accelerated cloud services and enterprise software adoption from offline industries and public sectors over the longer term.

"Expediting the 'new infrastructure' strategy will help further cement virus containment success," Guangming Daily quoted Tong as saying.

Tencent Cloud had 18% of China's cloud market in the fourth quarter, trailing Alibaba Group Holding Ltd which commanded 46.4%, according to research firm Canalys.

Alibaba said last month it would invest $28 billion in its cloud infrastructure over three years.