Tencent posted solid Q1 2026 results on May 13, with revenues of RMB 196.5 billion, a 9% increase year-over-year, below analyst expectations. Core operating profits, excluding new AI products, rose 17% to RMB 84.4 billion, while net profits landed between RMB 58.1 billion and RMB 69.8 billion. Tencent’s AI capital expenditure hit RMB 31.9 billion in Q1, roughly $4.4 billion, with management signaling a substantial increase for the second half of 2026. Q2 2026 earnings are due August 12, with analysts projecting approximately 10% year-over-year revenue growth. Meanwhile, DeepSeek secured approximately $7.4 billion in external funding, pushing its valuation beyond $50 billion as of June 2026, but has paused follow-on fundraising because data center infrastructure costs are eating through cash faster than projected. US restrictions on chip exports to China limit access to advanced semiconductors from Nvidia and other American chipmakers, forcing Chinese AI labs to stockpile older hardware, develop domestic alternatives, or find architectural workarounds. DeepSeek’s founder, Liang Wenfeng, has imposed a condition on investors: no poaching talent from the company. Tencent’s 17% growth in core operating profits gives management cover to keep spending, while DeepSeek faces a question about how long its money lasts.