ByteDance is far ahead, Alibaba's entire ecosystem is chasing, Tencent is betting on a large-scale model, and Baidu is out of the game (Zhang Lei's complete departure from Baidu). ByteDance's Doubao and Seedance Seedance 2.0 (i.e., Dream AI), combined with Douyin's massive video library, give ByteDance an innate AI gene (Toutiao), causing Alibaba and Tencent to suffer repeated defeats. In terms of revenue, profit, and overseas revenue, ByteDance is already far ahead, with total revenue of 1.31 trillion RMB (2.32 times that of Tencent) and net profit of 360 billion RMB (2.25 times that of Tencent). Since Tencent has chosen the path of an AI "follower," it must bear the market's skepticism and the compression of its valuation in the capital market. Tencent also faced skepticism when it entered the video market, but later, people recognized the quality of Tencent Video. WeChat and QQ are traffic portals, but of course, this will also face challenges from large-scale models and even smaller players. It is believed that Tencent's large-scale model will eventually return it to the forefront. Strong cash flow from games and WeChat, along with data, can support its AI investment. Unfortunately, ByteDance is not a publicly listed company, so among China's major tech companies, the only ones worth considering are Alibaba and Tencent. Tencent's recent stock price weakness stems from several factors. Besides halting share buybacks to conserve resources for the AI war, there's also a misunderstanding in the capital market regarding AI's impact on the gaming industry. Many believe AI will destroy the gaming industry, when in fact, the gaming industry has been using AI to improve efficiency and reduce costs, and Tencent is a "gaming platform." Furthermore, the valuation compression of US tech stocks has spilled over into Hong Kong stocks. Next Monday, the Hong Kong Stock Connect will reopen. With 50 million daily active users and 114 million monthly active users, whether this represents a satisfactory stage of AI development for investors remains to be seen. Recently, foreign capital has been the main sellers, while the Hong Kong Stock Connect has become a significant source of funds for increased investment. Incidentally, the dynamic price-to-earnings ratio (P/E ratio) for Meta is 21.28x, while Tencent's is 14.7x. Correction: In the previous post, among the 10 major tech stocks, NetEase had the highest profit margin.