Tencent recently released its full-year 2025 earnings report: total revenue of RMB 751.77 billion, up 14% year on year; net profit attributable to equity holders of the company of RMB 224.84 billion, up 16% year on year.

Beyond steady growth in its two core businesses—gaming and advertising—the biggest industry talking point in this set of results was the FinTech and Business Services segment, which delivered full-year revenue of RMB 229.43 billion. Notably, Tencent Cloud—which had long been in an investment-heavy phase—achieved scaled profitability for the first time on a full-year basis, alongside an acceleration in year-on-year growth. Tencent also continued to ramp up investment in AI: full-year capital expenditures reached RMB 79.2 billion and R&D spending totaled RMB 85.75 billion, both record highs.

The industry had widely assumed that “AI investment comes with heavy losses,” but the numbers in Tencent’s latest report told a different story.

According to the data, Tencent’s FinTech and Business Services segment saw its gross margin rise by 4 percentage points year on year to 51% in 2025. The key driver of the improvement in gross profit was no longer low-margin IaaS hardware sales, but rather rising demand for AI-related services