WeChat’s New AI Features Drive Tencent Shares Surge, Baidu Stock Drops

The launch of Deepseek’s AI technology on WeChat led to a surge in Tenant shares, while rival Baidu faced a slowdown in the stock value. The DeepSeek Wechat Debut has strengthened the position of the Tenant in the AI-operated tech race, which has increased the investment of the investor. Meanwhile, the stock of Baidu was seen to decline as concerns increased when its competitive standing in the AI market.

According to Yahoo Finance, the company said in a statement that Tencent is now integrating DeepSeek’s artificial intelligence model in WeChat search. This move comes after the Shenzhen company released a strong game which led to a surge in the share price of Tencent by 70% last year. In November 2024, Tencent’s Q3 profits were due to the launch of the new game.

Baidu Faces Challenges

While Tencent’s share surged from the AI-driven innovation, the shares of Baidu fell. The Baidu stocks declined by 8.8% after worries that Tencent’s increasing AI strengths would overshadow Baidu’s AI-centric business model. The Beijing-based company has been working on integrating DeepSeek into its search engines.

Investors were particularly nervous after a successful roll-out of AI integration of Deepseek and WeChat, a step that directly faces the leadership of Baidu in AI-operated search and chatbot features. The Baidu stock decline reflects the market’s reaction to Tencent’s aggressive push into the AI sector, potentially limiting Baidu’s future growth prospect

Goldman Sachs analyst, Kinger Lau wrote, “Widespread AI adoption could boost Chinese EPS by 2.5% per year over the next decade. As promising as AI could be to China’s growth trajectory, we believe forceful policy stimulus is still required to address deep-rooted macro challenges and drive sustainable equity gains.”

The Future of Tencent and Baidu in AI

The rollout of WeChat’s new AI features may be the start of a wider AI expansion plan for Tencent. Tencent has suggested more AI integration in its other digital platforms, such as gaming and cloud services. The integration of Tencent DeepSeek highlights Tencent’s serious intentions about using AI for future growth.

Baidu is also likely to double down on its R&D in AI to preserve its market lead. The firm has heavily invested in AI-powered search, autonomous driving, and cloud computing but is now under growing pressure from Tencent’s push.

While Baidu stock experienced a downturn, its analysts indicate that the AI industry is still very dynamic, and both companies will continue to introduce additional innovations over the next few months. Tencent’s capability to deploy AI in WeChat provides a significant advantage in user take-up and commercial utilization.