Tencent's Silent Encirclement

How Pony Ma's 2022 pivot positioned Tencent to dominate commerce in an AI-agent world

Underestimating Tencent, Again

Three things in life are certain: death, the second law of thermodynamics, and Tencent growing ad revenue by 20%.

Though honestly, with recent breakthroughs in longevity research, quantum computing, and AI-driven drug discovery, death and entropy might become optional. But Tencent’s 20% ad growth? That’s starting to feel like a new law of physics.

What continues to amaze me is the sheer farsightedness of Pony Ma and his team. People have already forgotten, but in December 2022, Ma held a pivotal internal meeting where he made a stark strategic pivot. He declared short video “the hope of the whole company” and turned it into Tencent’s top priority going forward.

This was Tencent’s Bill Gates “internet tidal wave” moment. The kind of strategic recalibration that separates great companies from roadkill. And in hindsight, Pony Ma and his team have been completely right. But more on that later.

What makes this pivot particularly impressive is that Tencent had already tried and failed in short video. Twice. Remember Weishi (微视)? Or Vue Vlog? At one point, they did what they often do when they can’t crack something themselves: they invested in another short video player — Kuaishou. But Pony Ma and his team realized how critical short video would become. So they sat down, studied what went wrong, absorbed the lessons, and came back with Video Accounts. This time properly integrated into the WeChat ecosystem. That kind of strategic persistence, learning from failure rather than running from it, is what distinguishes them.

I’ve been thinking a lot recently about business models—AI infrastructure, e-commerce in the age of AI, social commerce, ad tech. And suddenly, the connective tissue became visible. Things are falling into place across Tencent’s ecosystem in a way I hadn’t fully grasped before. I underestimated Tencent again. I now see much more clearly where they’re heading. And when the pieces align like this, it’s scary for their competitors.