This article first appeared on GuruFocus .
Tencent Holdings ( TCEHY ) shares rose more than 5% in Hong Kong on Tuesday after the company introduced a new image-generation system, adding another step to its push into consumer artificial intelligence.
The Hy Image 3.5 Preview model is being added to Tencent's Yuanbao chatbot as well as tools used for video editing and design. The company said the system improves on its previous version and expands its AI capabilities beyond text.
Tencent is also positioning the technology for its broader WeChat ecosystem, which serves more than one billion users. The company has been increasing its focus on practical AI applications as competition intensifies among Chinese technology companies.
The launch coincided with Alibaba Group (BABA) holding its annual AI conference, where it outlined plans for much larger AI models and introduced a new chip. The developments highlight the growing competition among Chinese technology companies as they build domestic AI capabilities.
Tencent's latest model was tested internally by hundreds of designers. The company said the system performed around the level of ByteDance's Seedream 5.0 Pro in those tests, while comparisons with competing models showed varying results.
