Tencent Holdings Ltd. has introduced its new artificial intelligence model, Hunyuan Turbo S, as the latest attempt by a major tech player to outpace DeepSeek, the startup that has shaken up the US-China tech competition. The Hunyuan Turbo S is designed to deliver responses at lightning speed, setting it apart from DeepSeek’s chatbot, which relies on deeper reasoning. Tencent also announced a significant reduction in deployment costs for the model, as shared through its official WeChat channel.
The unveiling of AI models has accelerated in recent weeks, with major industry players like OpenAI, Alibaba Group Holding Ltd. (BABA), and others rapidly launching new systems. This surge in development follows DeepSeek’s emergence, which stunned Silicon Valley by unveiling a model that rivaled the best offerings from OpenAI and Meta Platforms Inc. DeepSeek’s rise, particularly in China, has invigorated the local tech industry, which has long faced challenges in competing with the US.
“Every player will incorporate their techniques to improve their own architecture, and so we’ll keep seeing companies come up with new models that claim to be better,” noted Xin-Yao Ng, an investment director at abrdn plc. “Tencent is likely to invest heavily in AI infrastructure, like Alibaba, and expand its AI cloud business.”
Founded by quantitative hedge fund manager Liang Wenfeng, DeepSeek has disrupted the global AI sector since its dramatic debut in January. The company’s approach has altered fundamental assumptions about AI development and economics, reducing the US lead over Chinese competitors. This shift in the AI landscape even led to the largest stock wipeout in Nvidia Corp.’s history last month, while raising hopes for a tech revival in China’s internet sector.
According to analysts, Tencent’s Hunyuan Turbo S, while faster than DeepSeek’s R1, may not significantly boost its earnings in the short term. The model represents Tencent’s attempt to catch up in the AI race, but the company’s AI initiatives are expected to remain unprofitable for at least the next three years.
The Turbo S is now available to developers and enterprise users through Tencent’s cloud services. It will also undergo testing among selected users of Tencent’s consumer-facing chatbot, Yuanbao, which has faced challenges in gaining traction compared to its rivals.
Tencent’s move follows closely on the heels of Alibaba, which launched its own Qwen AI model and benchmarked it against DeepSeek. Last week, Tencent revealed that Hunyuan Turbo S performed competitively against DeepSeek’s V3 model in common AI tests. Meanwhile, Baidu Inc. plans to release its new “Ernie” platform on March 16, and ByteDance Ltd. is testing a model akin to DeepSeek’s R1.
The competition is intensifying, particularly with DeepSeek’s growing influence in China. The startup has gained wide adoption among corporate and government entities, and earlier last month, President Xi Jinping invited Liang Wenfeng to a select tech leaders’ forum, signaling DeepSeek’s rise as a national technology champion.
DeepSeek’s popularity has led to server capacity issues, forcing the company to temporarily restrict certain services. To address this, it reduced pricing for its application programming interface (API) during off-peak hours. The company also recently announced plans to release key code and data to the public, a move that sets it apart from rivals like OpenAI and positions it as a champion of the open-source approach to AI development.
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