$TENCENT(00700.HK) took a closer look at part of the financial report:

In the fourth quarter, the Group generated free cash flow of RMB 4.5 billion. This was offset by net cash flow from operating activities of RMB 54 billion, capital expenditures related to our AI project development of RMB 39 billion, media content payments of RMB 8.5 billion, and lease liability payments of RMB 2 billion.

What does this mean? My own understanding is that the free cash flow in Q4 was basically consumed by AI. To put it bluntly, next year, apart from the 450+800 shareholder returns, the remaining free cash flow is also likely to be consumed by AI.

Overall, Tencent has officially entered the AI race, but where is its positioning, and can it survive the competition?

Let's take a look at $BABA-W(09988.HK), Alibaba Cloud and AI model scale is more than three times that of Tencent, and Alibaba's investment of 380 billion is mainly to expand computing power reserves. Tencent, on the other hand, does not need to reserve so much computing power, as Tencent Cloud is just average. From this perspective, Tencent is more about indirect high-frequency investments,