Core Insights - The article highlights the significant impact of artificial intelligence (AI) on the financial performance and capital expenditure strategies of major tech companies, indicating that AI is now a critical component of their business models [3][5][14]. Group 1: Big Tech Performance - In Q3 2025, major tech companies like Microsoft, Alphabet, Amazon, Meta, and Apple reported strong revenue growth driven by AI and cloud services, with double-digit revenue gains [3][5]. - Microsoft experienced an 18% year-on-year revenue increase to $77.7 billion, largely due to demand for AI-enhanced Azure services, with capital expenditure reaching nearly $35 billion [9]. - Alphabet's revenue rose 16% to $102.3 billion, benefiting from enterprise AI demand, and it increased its 2025 capex guidance to $91–93 billion [9]. - Amazon's capital expenditure for the first three quarters of 2025 was $89.9 billion, with AWS revenue growing 20% in Q3, marking its fastest growth in years [9]. - Meta reported a 26% year-on-year revenue growth, with Q3 capex reaching $19.4 billion, as it plans to invest heavily in AI infrastructure [9]. - Apple achieved a record $94 billion in revenue for its June quarter, emphasizing significant growth in AI investments across its devices and services [9]. Group 2: Alibaba and Tencent's Strategies - Alibaba reported a 5% year-on-year revenue increase to RMB 247,795 million (US$34,769 million) but faced a 53% decline in net income to RMB 20,612 million (US$2,893 million) due to heavy investments [7]. - Tencent's revenue rose 15% year-on-year to RMB 192.9 billion (about $27 billion), with net profit increasing by 19%, showcasing resilience amid economic challenges [8]. - Tencent's capital expenditure in Q3 2025 was approximately RMB 13 billion (~$1.8 billion), down 24% from the previous year, indicating a more conservative spending approach compared to U.S. counterparts [13]. - Tencent's advertising revenue surged 21% year-on-year, attributed to AI-driven improvements in ad targeting and creativity [10]. Group 3: AI Infrastructure Investment - Big Tech companies are treating AI and cloud infrastructure as foundational investments, with capital expenditure profiles resembling national-scale infrastructure projects [6]. - The article notes a divergence in strategies, with U.S. firms focusing on building extensive AI infrastructure while Tencent emphasizes integrating AI into its existing ecosystem [14][19]. - The heavy spending on AI infrastructure by U.S. companies is solidifying their market dominance, creating a competitive landscape where smaller players may struggle to keep pace [14]. Group 4: Future Outlook - The article suggests that the AI investment cycle is global and shows no signs of slowing, with companies needing to demonstrate that their AI investments can drive sustainable growth [17][18]. - The contrasting strategies of U.S. tech giants and Chinese companies like Alibaba and Tencent may shape the future of AI monetization and efficiency [19].

Financial Performance Highlights - Total revenue for FY2024 reached RMB 660.3 billion, an increase of 8% year-over-year[12] - Gross profit for FY2024 was RMB 349.2 billion, up 19% year-over-year[12] - Non-IFRS operating profit for FY2024 was RMB 237.8 billion, representing a 24% year-over-year increase[12] - Non-IFRS net profit attributable to equity holders for FY2024 increased by 41% year-over-year to RMB 222.7 billion[12] - Marketing Services revenue grew by 20% year-over-year in FY2024, reaching RMB 121.4 billion[12] Business Segment Performance - Value-added Services revenue increased by 7% year-over-year to RMB 319.2 billion in FY2024[12] - Domestic Games revenue increased by 10% year-over-year to RMB 139.7 billion in FY2024[12] - International Games revenue increased by 9% year-over-year to RMB 58.0 billion in FY2024[12] - FinTech and Business Services revenue increased by 4% year-over-year to RMB 212.0 billion in FY2024[12] AI Investment and Development - The company is investing heavily in its proprietary HY Foundation Model since 2023[17] - AI cloud revenue approximately doubled year-over-year in FY24[22] - Video Accounts marketing services revenue grew over 60% year-over-year[61] Shareholder Returns - The company executed a share buyback of HKD 112 billion (+127% year-over-year) in FY24[11] - A cash dividend of HKD 32 billion (+39% year-over-year) was paid in May 2024[11] - Proposed 2024 annual dividend of HKD 4.50 per share (up 32% year-over-year) or HKD 41 billion for the year ended 31 December 2024[84]