Tencent States Sufficient AI GPU Inventory, No Immediate Plans for Nvidia H20 Purchases

During Tencent's Q2 earnings call, President Martin Lau stated that the company currently maintains ample AI GPU inventory, fully sufficient to support future model training needs. As a result, there are no immediate plans to procure Nvidia's H20 chips.

Lau emphasized Tencent's diversified technical approach, including exploring alternative solutions like ASICs and domestic GPUs for AI inference. The company is also focusing on software optimization, aiming to triple AI inference efficiency – effectively doubling the computational capacity of existing hardware while reducing reliance on new chip purchases.

This decision reflects multiple strategic considerations: robust inventory coverage for long-term needs, reduced dependency on single-source suppliers, significantly improved hardware utilization through software, and ongoing policy uncertainties surrounding Nvidia's H20 chips, which are currently under review by Chinese cybersecurity authorities.

While AI infrastructure costs continue rising, Lau noted Tencent is already realizing returns from AI investments and shifting focus toward revenue growth and broader infrastructure development. The company's Q2 capital expenditures decreased 30% sequentially, demonstrating how strategic inventory planning has strengthened its supply chain resilience.