Tencent bets its China WeChat and gaming expertise will help it win cloud business in Europe

Tencent, renowned as a powerhouse in China's gaming and social media sectors, is setting its sights on Europe to expand its cloud computing business. Dowson Tong, the CEO of Tencent's cloud division, shared insights into the company's strategy during a recent interview with CNBC. Tong emphasized the firm’s extensive experience in specific technological domains and industry sectors, which have been cultivated over years through their products in China. "We have strengths and competence in very specific technology areas, as well as industry verticals," he stated. Tencent is now keen to leverage this expertise to attract potential customers in Europe. As Tencent enters the competitive European landscape, it will face off against major U.S. cloud providers like Amazon, Microsoft, and Google, who dominate approximately 70% of the market. However, Tencent aims to carve out a niche by focusing on its unique capabilities, particularly in cloud technologies that enhance video streaming, optimize gaming experiences, and support the development of multifunctional applications, often referred to as "super apps," similar to WeChat. For instance, Tencent has collaborated with French telecom company Orange to enhance the Max it app in Africa. In the gaming sector, the company's cloud solutions are designed to reduce latency, which is crucial for seamless gameplay. Tong noted that many European firms are looking for diversified cloud solutions rather than relying solely on a couple of major providers. "This is a deliberate strategy of ours to instill confidence in our technology, especially in a multi-cloud environment," he explained. Additionally, as cloud computing firms increasingly emphasize artificial intelligence tools to differentiate themselves, Tencent has developed its own AI foundational model known as Hunyuan. The company plans to adopt a similar strategy in Europe, potentially incorporating local AI models into its offerings. "Our focus would be providing tools that work with various foundation models, allowing customers to choose the one that best fits their needs," Tong concluded, highlighting the company's commitment to understanding and addressing customer demands while maximizing cost efficiency.