Tencent has updated its Hunyuan AI model, its first major release since it recruited Yao Shunyu, a leading AI scientist from OpenAI. Tencent’s Hy3 model, currently available in preview, offers improvements in areas from complex reasoning to coding.

The Chinese technology conglomerate is playing catch-up with other Chinese AI developers including ByteDance, Alibaba and DeepSeek. China is betting big on open-source AI to offer alternatives to major US players. Back in 2023, Tencent claimed its then-new Hunyuan LLM was a more powerful and intelligent option than the versions of ChatGPT and Llama available at the time.

Tencent has backed AI start-ups including Moonshot AI and StepFun, hoping that they will boost its cloud computing division. The company has also restructured its research team to improve the quality of training data. It aims to double its investment in AI to more than $5 billion this year.

Not to be outdone, DeepSeek announced its V4 Flash and V4 Pro Series, the newest versions of its LLM model. DeepSeek became an overnight hit in January 2025 with the launch of its R1 AI model and has gone on to develop other models since. It said the V4 model upgrades will offer users advances in reasoning and agentic tasks, while a new feature called Hybrid Attention Architecture improves the ability of the AI platform to remember queries across long conversations.