Tencent Holdings Ltd's investment in electric car maker Tesla Inc, announced on Tuesday, highlights the internet giant's strategic focus in artificial intelligence-backed applications, notably in the realm of smart vehicles.
The Chinese internet conglomerate scooped up 5 percent of Tesla's shares for around $1.78 billion to become its fifth-largest shareholder, according to a filing to the United States Securities and Exchange Commission.
Tencent is bullish on Tesla's new technologies, "including electric cars, assisted driving and shared vehicles".
The company said its success is partly due to its record of providing capital backing for entrepreneurs, and that Tesla CEO Elon Musk is the archetype for such entrepreneurship.
The move comes alongside Tesla raising $1.4 billion in a separate offering of stock and debt, increasing its liquidity to mass produce its new, cheaper Model 3 sedan.
The deal comes after Tencent, a prolific investor in gaming and social networks, expands its presence in the transportation sector. It has invested in China's largest ride-sharing startup Didi Chuxing, and Shanghai-based electric car developer NextEV.
Tencent has also stepped up its own AI efforts, setting up a related research lab last year. Its current prowess in the area is exemplified by a championship this month in the strategic game Go, which Google Inc made its mark on when its AI AlphaGo triumphed over world champion Lee See-dol last year.
Tencent Holdings Ltd's investment in electric car maker Tesla Inc, announced on Tuesday, highlights the internet giant's strategic focus in artificial intelligence-backed applications, notably in the realm of smart vehicles.
