This article first appeared in The Edge Malaysia Weekly on October 2, 2023 - October 8, 2023

IN the early 1980s, economic reforms introduced by former Chinese paramount leader Deng Xiaoping resulted in Shenzhen becoming China’s first special economic zone because of its proximity to Hong Kong, attracting foreign direct investment and migrants searching for opportunities.

Forty years on, Shenzhen is now a thriving metropolis and long-held symbol of China’s reform and liberalisation, having transformed from a quiet fishing village into a sprawling industrial and financial megacity.

Located just about 30km from recently rain-battered Hong Kong, which suffered its worst flash flooding in 140 years, Shenzhen did not escape the chaos caused by the extreme weather either.

Amid the storm, Shenzhen’s towering skyscrapers illuminated by rain gave the city a cyberpunk aura reminiscent of Blade Runner, the iconic science-fiction film directed by Ridley Scott in 1982.

While Blade Runner’s flying cars may still be a dream for the future, electric vehicles such as Tesla and BYD can already be spotted everywhere on the streets of Shenzhen, a city widely regarded as China’s Silicon Valley.

With a population of more than 17.7 million, the bustling tech hub is also home to Hong Kong-listed Chinese internet and gaming giant Tencent Holdings Ltd, which operates China’s killer app Weixin and developed the popular first-person shooter video game, Call of Duty: Mobile.

On Sept 7, the Shenzhen-based Tencent officially unveiled its proprietary large foundation model, dubbed “Hunyuan”, for business use.

By integrating its capabilities with Tencent’s existing products for video conferencing and social media, Hunyuan — a ChatGPT-like artificial intelligence (AI)-powered chatbot — is now open to enterprises in China for testing and building apps via application programming interfaces (APIs) on Tencent Cloud.

The name “Hunyuan” (»ìÔª) in Chinese culture represents the primordial state of the universe, as well as the emergence of the elements and forms of life. It is named with the intention of reflecting its vast knowledge and semantic understanding capabilities.

Tencent’s newly launched chatbot is in compliance with new Chinese regulations on generative AI, which came into effect on Aug 15.

In contrast to many other nations, China mandates that companies must undergo security assessments and obtain clearance before introducing mass-market AI products. Previously, businesses were restricted to conducting limited public tests of their AI products.

However, in response to the growing importance of AI as a competitive focal point to the US, authorities in China recently ramped up efforts to bolster companies engaged in AI development.

Under the new rules, prior government authorisation is no longer required for products targeted at businesses. In the past few weeks, Chinese companies such as Baidu Inc and SenseTime Group Inc have been granted approval to introduce AI-powered chatbots to the public.

Over in the US on Sept 25, Amazon.com announced plans to invest up to US$4 billion (RM18.7 billion) cash in Anthropic — a San Francisco-based AI start-up founded by former executives of OpenAI, upping the ante in the AI war.

Meanwhile, following the blockbuster listing of its chip design unit Arm Holdings Plc in mid-September, Japan’s SoftBank Group Corp is also reportedly looking for deals in AI, including a potential investment in OpenAI, the creator of ChatGPT.

In recent years, although Tencent continues to improve on its stronghold of consumer internet services, it has also been leveraging its strength in video games and social media to actively grow its ecosystem. This has led it to explore the global cloud market, and offer relevant industry vertical business solutions in China and other parts of the world.

In a small group media interview at Tencent Binhai Mansion — the conglomerate’s twin-skyscraper global headquarters in the Nanshan District — Tencent senior executive vice-president Dowson Tong highlights that Hunyuan features strong Chinese language processing abilities and advanced logical reasoning, and comes with reliable task execution abilities.

Tong, who is also CEO of Cloud and Smart Industries Group (CSIG), points out that Hunyuan empowers enterprises to build powerful tools and apps with it, in addition to training their own unique large models derived from Tencent’s Model-as-a-Service (MaaS) offering.

“We strategically choose specific industries with a focus on addressing our customer needs. By avoiding saturated ‘red ocean’ markets, such as chatbots, we [focus] our efforts on offering services in areas like video conferencing and online document repositories, with large model capabilities, ensuring a targeted and effective approach to AI implementation,” he stresses.

Tong reiterates that AI will continue to be a key driver for cloud growth, with increasing demand for enterprises to build and train their own models.

“Overall, AI is not just one single product but a great capability that can be leveraged and instrumented into different applications to serve different business scenarios. AI capabilities enhance productivity in various use cases.

“For example, users can benefit from AI-generated meeting minutes, which can summarise an hour-long conversation within just 10 seconds, and this efficient feature significantly enhances enterprise user productivity,” he says, noting that Tencent operates its own video conference platform called Tencent Meeting.

Tong points out that Malaysia is an important market for Tencent, with a local team serving the digital technology needs of enterprise customers.

“In the financial sector, we see opportunities in database solutions, public cloud and on-premise cloud solutions. Video solutions and media services also present potential growth areas,” he says.

While Tencent currently does not have a data centre in Malaysia, Tong acknowledges that some of its customers plan to have a graphics processing unit (GPU) computing operations in specific countries, including Malaysia.

“We will continue to monitor and consider expanding our services and coverage in response to customer demand for cloud services. To address traditional sectors in Malaysia, we rely on partners who understand the region, specific countries, and particular industries, enabling us to better meet their needs,” he says.

Tong says many of Tencent’s customers have data centres in Singapore, but owning a data centre in the city state is “actually pretty expensive” in terms of cost of electricity, not to mention the limitation on further expansion.

“We have heard from our customers who are asking for an alternative. Malaysia, being close to their regional hubs, definitely has a unique advantage,” he says.

Tencent organised Tencent Media Connect Day and Tencent Global Digital Ecosystem Summit 2023 — its annual flagship conference — between Sept 5 and 8 in Shenzhen.

Malaysia’s tech companies can learn from the manner in which the Chinese tech giants have cultivated robust ecosystems — a feature that truly sets them apart from the rest.

While Malaysia boasts e-hailing, e-payment and restaurant apps, China’s tech solutions offer a seamless experience that eliminates the need for constant app-switching and separate logins. Tencent’s diverse digital ecosystem spans crucial verticals such as cloud, social communications, payment services and entertainment.

And, now, the latest in hand is palm-scanning payment, which is proving to be a game-changer. With this innovation, payment headaches caused by dead batteries become a thing of the past.

In a move that feels straight out of a sci-fi movie, Weixin Pay has introduced palm print-based technology for power bank rentals in Shenzhen’s Coastal City, starting from Sept 5.

When your smartphone decides to take a break, you might find yourself unable to rent a power bank using your e-wallet (unless you have smartwatches or credit cards at hand, of course).

That is where palm payment steps in, enabling cashless transactions even when you have left your wallet, credit card or smartwatch behind.

Essentially, your palm becomes the key to a world of convenience.

Shenzhen’s embrace of technology epitomises China’s cutting-edge spirit, where futuristic visions are transformed into everyday reality. In fact, Weixin Pay has played a pioneering role in China’s “mobile-first” society.

The mobile payment and digital wallet service provider works with local merchants across the region to onboard them on the Weixin ecosystem to provide its users with a seamless payment ecosystem and experience.

This includes popular travel destinations frequented by Chinese tourists, such as Southeast Asia. In addition to Mainland China, Weixin Pay is also available in 69 countries and regions.

Weixin Pay International Business marketing director Monica Zheng believes one of the main reasons that Weixin Pay is so successful is that Weixin has a “very powerful ecosystem”.

“To us, as long as there is e-payment demand for Mainland Chinese in a foreign country, Weixin Pay has a good chance to be successful there. If you look at what we have done in China and some other countries, Weixin has become a contactless tool for restaurant patrons to view menus, order and pay with a snap of their smartphones.

“During the Covid-19 pandemic, the cross-borders and local merchants had rushed to the e-commerce ecosystem. Our Weixin ecosystem enables them to maximise their profits,” she says.

Apart from operating Weixin — a widely used messaging and payments app in China — and its sister app WeChat — designed for overseas users — Tencent is also one of the world’s largest video game vendors.

Notable game titles under Tencent in Southeast Asia include PUBG Mobile, Valorant, League of Legends, Teamfight Tactics, Call of Duty: Mobile and Arena of Valor.

In 2021, Tencent launched its global gaming brand dubbed Level Infinite to deliver its engaging interactive entertainment experiences to a worldwide audience.

Level Infinite senior director of marketing Anthony Crouts foresees the gaming and esports landscape evolving significantly in the coming years, with a strong focus on content and the implementation of esports features.

“Our approach is to concentrate on our strengths and strive for innovation, rather than merely competing with others. By conducting user testing and gathering insights from our audience, we aim to stay ahead of the curve and lead the industry as trailblazers,” he says.

Crouts adds that Level Infinite’s focus is on identifying and promoting good games, regardless of their origin.“There is certainly potential for a video game and mobile gaming development industry in Malaysia, and Level Infinite could play a significant role in fostering such development if we identify the right opportunities.”

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