Tencent announced its progress in chip development for the first-time this week. This gave Tencent's stock price a slight boost. It seems that Silicon is far from the main areas of social media and video games. Therefore, observers believe that Tencent's announcement is to indicate that it is aligned with Chinas long term goals to self-develop semiconductors while its gaming unit is being subject to a series of regulatory attacks. The other tech giants that have responded to Beijing's silicon push, including Baidu, Huawei and Baidu, all have their own chips.
However, Tencent has so much data that it should be able to wonder why they didn't invest in semiconductors sooner.
Three chips that Tencent revealed Wednesday were all custom-built: one for AI Inference, one to video transcoding and one for network interface.
Numerous examples have shown that internet giants build their own hardware to support their businesses. In 2018, Facebook had already hired AI chip designers to help with misinformation and processing its enormous amount of user data.
Tencent has over one billion monthly WeChat users. That's a lot of digital footprints.
Allen Zhang, WeChats' steward, is notoriously cautious about using personal data. WeChats' user feed has been kept chronological, with native ads appearing sporadically.
We can generate great advertising revenue by analysing [users chat history]. WeChat doesn't do that so Zhang stated at WeChats annual conference last summer that WeChat is very concerned about user privacy. Zhang wants WeChat be useful and disposable, not an app that consumes people's time with algorithmic, addictive recommendations.
Zhang appears to have made concessions. WeChat now has a video section that uses the basic functions of TikTok. WeChat's video feature, like TikTok does the same thing: it infers user preferences and presents content accordingly.
Tencent also has other business lines that could be benefited from more machine learning power and may be more eager to monetize. These include Tencent News, which is its news aggregator and Tencent Video which is its Netflix equivalent. China's strict censorship environment may force content providers to use more computing power to remove text, audio, and videos that are in violation of government regulations.
Tencents senior vice-president Dowson Tong explained that the AI inference chip of Tencents will be used to process image and video, natural language processing, and search. As the chip for video transcoding is named, it will provide smoothness and low latency to Tencent's massive video workload. Tong also stated that the SmartNIC smart network interface card (SmartNIC), will be used to offload CPU server workloads.
Tencent will not be solely focused on chips. Tong stated in his speech that Tencent will not be solely focused on chips.