CGTN Europe interviewed Rob Kniaz, Founding Partner, H Tree Capital
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00:00The Chinese tech giant Tencent has reported a 90% increase in profits in the year
00:062024 as China goes all-out to generate growth from innovation
00:12Total revenue rose 11% year-on-year. Thanks to an increase in gaming and advertising incomes
00:20Tencent's profits were also boosted by artificial intelligence
00:24It's released two new models recently
00:27when you on 3d 2.0 can turn text or images into 3d graphics and
00:33Turbo S is designed to answer user queries as quickly as possible
00:38But expansion into AI came with a sharp increase in spending
00:43Tencent spent over ten point six billion dollars last year more than triple what it spent in
00:482023 the tech giant says servers and chips were the big expenses
00:53Rob Niaz is from the tech a venture capital firm Hoxton ventures that good to see you back on the program Rob
00:59Thank you for joining us
01:00So why has a Tencent done so well? I?
01:04Think they're riding the same wave of AI that pretty much every big tech company is riding right now
01:09They're a bit later to the curve and I think the AI wave hasn't really hit China until the past few months
01:15But they're right in the middle of the storm right now where the customers are pouring in
01:20So artificial intelligence clearly a factor in Tencent success not just the Tencent though
01:27How important is AI in the success of Chinese tech companies more broadly? I?
01:33Think it's a global question that AI is gonna affect
01:36You know every business around the world in different ways and it's sort of a wave of adoption right now as companies as countries have
01:41You know the money and resource to start adopting it China was probably a bit late in that regard
01:46But now they're catching up and they're in the thick of it where you're seeing companies being applied
01:52companies starting up every day and
01:54Of course, you know when you're in a land grab
01:57They benefit goes to the guy selling the picks and shuffles, which are the Tencent some of those with the cloud products
02:02What about supply though?
02:04We know that demand for the kind of products that Tencent makes is there but are there still questions about Tencent and other companies?
02:12Meeting that increasing demand
02:15Yeah, it comes down to the GPU the
02:19Central processing unit that's used for AI and that's a zero-sum game where I was manufacturers and I won
02:24They're pushing out as many chips if they can they're subject to export controls where they can't necessarily put specs chips
02:31on the market in China
02:33the China's gonna coming from and
02:35Place it would be an underdog and having access to the right materials
02:40There are some I think the Chinese are clever and we'll find ways around it like you saw with deep-seek
02:45They're able to do it with lower power and chips and write more efficient software
02:48That's insane. So I think the the pool is there and the market will find a way
02:53Well, I want to do a bit of a preview of something
02:55We're going to talk a bit more about in the program a moment, which is Nvidia
02:58They have of course been at the forefront of the kind of technology used in AI. They're now going to launch
03:04New kinds of chips. What does that mean for Chinese companies and companies like deep-seek?
03:11Yeah, I think what Nvidia is doing is segmenting their market so they can target what customers specifically need
03:17So if you think about a regular graphics card, there's a lot of features in that that a machine learning expert doesn't really need
03:23So we need to give things like the onboard RAM of the card
03:26I think they're gonna do a lot more segmentation to try and find ways of meeting the customer needs it in a more
03:32Targeted way we saw this with the chips the deep-seek use. They were sort of
03:36Neuter of neutralized chips versus the ones sold in the US, but they were still quite powerful
03:41There were certain things that were disabled in them, but they were able to work around them to get the result
03:46They needed so I think it's more of that where you're you're taking the
03:50Taking the animal and carving up all the pieces and trying to make dinner with
03:54every bit you can
03:56Well great to talk to you again. Thanks for coming back on the program. That's Rob Niaz from venture capital firm Hoxton ventures