In February of the past year, two seemingly unrelated events occurred simultaneously: Tencent Technology publicly disclosed a patent for a GLP-1 weight-loss drug designed by AI; meanwhile, as the largest institutional shareholder with a 17.96% stake, Distinct HealthCare's stock price once fell below its IPO price after listing on the Hong Kong Stock Exchange.

The former demonstrates Tencent leveraging its AI capabilities, which it is fully committed to, to enter the hottest and most lucrative track in the global pharmaceutical market, seeking to participate in this weight-loss bonanza at the molecular source level. The latter reveals that even in the "mid-to-high-end medical services" sector, capital market sentiment remains cautious, and Tencent's vast investment portfolio does not always turn everything it touches into gold.

Placing these two events side by side allows us to gradually outline Tencent's complex and realistic strategic landscape in the healthcare sector:

It is no longer just a financial player that only invested in "internet appointment registration" in its early days, nor has it yet become a "new deity" capable of easily disrupting the pharmaceutical industry. However, for the sake of a longer-term "connection," it has begun to aggressively "acquire drugs."

Against the backdrop of a sharp reduction in overall investments—from nearly 300 deals in 2021 to just 25 in 2024—nearly 40% of Tencent's investments have been concentrated in healthcare, particularly in the field of innovative drugs.

This is no accident. As the dividends of internet traffic have peaked, hard technology and life sciences have become focal points of national strategy and industrial competition. Tencent's investment philosophy has undergone a fundamental shift: moving from pursuing the breadth of its ecosystem to betting on the depth of technological moats and long-term value.

Pharmaceuticals, especially innovative drugs deeply integrated with AI, have become Tencent's new focus.

Three Shifts in Tencent's Healthcare Investments

Tencent's interest in healthcare began with traffic and connectivity.

In 2014, Tencent initiated its "internet healthcare" investment phase. Over the following years, it invested in nearly all major platforms, including WeDoctor, Haodf Online, and Medlinker, with the logic of building a closed loop connecting hospitals, doctors, and patients, acting as a "road builder" for medical information.

However, the model of connecting everything through the internet soon hit a ceiling against the solid and complex healthcare system. After the "930" restructuring in 2018, Tencent shifted toward industrial internet, and its healthcare business also moved from the front line to behind the scenes, emphasizing the provision of underlying tools for the industry. Investment directions subsequently broadened, extending from medical services to areas such as medical big data and AI-assisted diagnostics.

The third true shift occurred in the past two to three years. Tencent's investment reach extended into the field of innovative drug R&D, the most capital-intensive, longest-cycle, and highest-barrier area.

Based on public information, since 2023, Tencent, through its investment entities, has invested in multiple innovative drug companies and biotech firms, including AI pharmaceutical companies such as XtalPi and Insilico Medicine.

According to Qichacha data, in 2024, Tencent made 8 investments in the pharmaceutical sector, covering areas such as innovative drug R&D, ultrasound imaging, and early screening and testing. It invested in companies including Sinovant ，Sciences,UniXell, IMPACT Therapeutics,DERMAVON HOLDINGS LIMITED.

It is important to note that 2024 was the most "conservative" year for Tencent Investments in recent times, with only 22 deals throughout the year—a significant decline compared to 30 deals in 2023, 47 in 2022, and 218 in 2021.

Entering 2025, Tencent continued to make frequent moves in the innovative drug sector. Most notably, it increased its stake in DERMAVON HOLDINGS LIMITED through multiple rounds of transactions, ultimately holding 11.73% of shares, becoming the second-largest shareholder after the founding team. What Tencent undoubtedly values is DERMAVON HOLDINGS LIMITED's presence and potential in the kidney disease field. The company's core pipeline candidates, AP306 and AP301, have entered late-stage clinical development, targeting gaps in hyperphosphatemia treatment. If successfully launched, they are expected to generate substantial investment returns for Tencent.

In addition to DERMAVON HOLDINGS LIMITED, Tencent has also invested in biotechs such as Leads Biolabs,

,TrueLab Biopharmaceutical, MagicRNA, and T-Therapeutics, continuously making strategic moves in the fields of oncology, metabolism, and autoimmune diseases.

At the beginning of 2026, Tencent participated in an investment in Chengdu Zenitar Biomedical Technology ; in February, it also disclosed a GLP-1 patent.

From domestic to overseas, from biotech to AI pharma, and even directly developing new molecules, it is evident that Tencent is serious about innovative drugs. This indicates that Tencent, which has been building its healthcare presence for over a decade, is undergoing a fundamental shift in its strategy.

Bottom Fishing and Seizing the Trend

Tencent's investments in innovative drugs over the past few years have coincided with the industry's most profound period of turbulence.

Unlike the frenzy in the AI sector, the innovative drug sector was still experiencing a capital winter in the first half of 2024. The overall performance of the pharmaceutical sector remained among the worst in the entire market, with primary market financing continuing to decline.

However, in stark contrast, the fundamentals of China's innovative drug sector are continuously improving. The significant enhancement of R&D capabilities and standards has led to the emergence of globally pioneering technologies. For example, PD-1/VEGF bispecific antibodies and EGFR/HER3 bispecific antibody-drug conjugates (ADCs) were first pioneered by Chinese companies, with overseas companies following suit after these sub-sectors were established.

From the boom in bispecific antibody business development (BD) to the emergence of the NewCo model, all these developments bear witness to the rise of domestically developed innovative drugs. "In 2024, every large pharmaceutical company's R&D head visited China at least once." This statement, appearing in a report from investment bank Stifel Financial, reflects the global popularity of Chinese innovative assets.

Consequently, BD has become the primary source of financing for innovative drugs. The logic for large overseas pharmaceutical companies is simple: Chinese molecules are high-quality, developed quickly, and cost-effective. This is the same logic that Tencent, as an investor, follows in continuously increasing its investments during a period of industry turbulence.

Beyond "bottom fishing," AI is also fundamentally rewriting the underlying logic of innovative drug development.

Since the emergence of ChatGPT, dozens of vertical medical AI models have been launched in just a few years, significantly breaking through and enhancing the efficiency of drug R&D. A February 2025 report from the U.S. National Institutes of Health (NIH) database showed that as of December 2023, the success rate for AI-discovered drugs that entered Phase I trials was between 80% and 90%, significantly higher than the average of approximately 40% for traditional methods.

Today, AI technology is deeply integrated into various stages, from target discovery and drug molecule design to clinical trials. Many players hope to leverage AI to transform the traditional paradigm of innovative drug R&D. This corresponds to a massive market opportunity. Innovative drug R&D adheres to the "double ten" law, requiring over ten years and $1 billion in costs; AI has the potential to change all of this.

No one doubts Jensen Huang's assertion that the most worthwhile field for AI application is life sciences. Tencent also wants to seize this opportunity.

AI is all about implementation. Beyond technology and products, Tencent is positioning pharmaceuticals as a core "scenario" for its AI deployment. In recent years, Tencent has not only launched a medical large language model and a multi-scenario AI product matrix, including intelligent Q&A, family doctor assistants, and digital medical imaging platforms, but has also been actively investing in AI pharmaceutical development.

In July 2020, Tencent launched the AI drug discovery platform "Cloud Intelligence Pharma," utilizing AI technology to accelerate the new drug R&D process. Subsequently, Tencent also invested in several leading AI companies and AI pharmaceutical firms to strengthen its capabilities.

"Cloud Intelligence Pharma" previously disclosed a novel protein structure prediction algorithm framework called tFold, marking its entry into the deep waters of R&D. The recently disclosed GLP-1 patent is a concrete manifestation of Tencent integrating its technological advantages with the innovative drug industry.

Traditional GLP-1 drugs are long-sequence molecules that mimic endogenous human peptides, with complex synthesis processes. Tencent, through precise computation and deep learning model optimization, designed a novel short-sequence peptide (QDEEGLLLMQSLEMS) and validated its activity in cellular experiments. This demonstrates the potential of Tencent's AI-driven pharmaceutical development.

GLP-1 is currently the most lucrative sector in the global pharmaceutical market. Tirzepatide generated $36.507 billion in 2025, indicating that medical needs represented by weight loss and metabolic diseases have transformed from a potential market into a commercial juggernaut. Both large and small pharmaceutical companies are heavily investing in this space, hoping to secure a share.

It appears that Tencent also wants to seize this opportunity.。

Disruption vs. Non-Disruption

Of course, Tencent will not directly take drugs into clinical trials itself.

Wu Wenda, President of Tencent Health, has stated that for scenarios such as innovative drug development that "are deeply clinical and particularly complex," they are left to companies with comparative advantages. Tencent's strategy is to combine investments (such as in metabolic disease companies Sciwind Biosciences and Minwei Biotech) with in-house AI R&D, using AI capabilities to empower the industry.

For example, in October 2024, Tencent invested in early screening company Insighta. Co-founder Allen Chan stated that Tencent's technical expertise in AI, combined with FRAGMA technology, would further drive advances in early cancer diagnostic technology. Wu Wenda personally serving as a director underscores Tencent's strategic intent.

Additionally, Tencent Health has revealed that it is collaborating with the First Affiliated Hospital of Guangzhou Medical University to develop an AI pathology algorithm capable of directly predicting gene mutation types from pathology slide images. This could significantly reduce the cost and time of traditional genetic testing, a process that typically takes weeks and is expensive.

These actions mean that while empowering through investments, Tencent is also finding the most challenging and valuable application scenarios for its AI technology.

Beyond early screening, Tencent is even constructing a knowledge graph and research database on antibiotic resistance, using AI technology to study resistance mechanisms in different bacteria, attempting to stay one step ahead in the "cat-and-mouse game."

This is a global public health issue that also faces challenges such as a lack of payers and regional inequalities. Tencent has stated its commitment to collaborating with various sectors to accelerate the screening and development of novel antibiotic compounds.

Of course, in contrast to such long-term scientific research projects, Tencent is also pursuing short-term certainty. Looking at its investment portfolio, many innovative drug projects are in later stages, with some investments even made at the IPO phase, indicating a pursuit of relative certainty. For instance, DERMAVON HOLDINGS LIMITED's AP301 is approaching market approval, and Gensciences has initiated its IPO process. These companies nearing commercialization can not only provide rapid investment returns but also create synergies with Tencent's healthcare and AI ecosystem.

As Wu Wenda put it, Tencent's greatest strength still lies in its "connectivity" capability. This is perhaps the underlying logic behind Tencent's aggressive investments in innovative drug companies in recent years.

Unlike other internet giants, Tencent does not intend to tell a story of excessive disruption. It also claims to have no interest in selling drugs. Instead, it aims to be a provider of tools, leveraging its B2B business to sell cloud services and algorithms to clients, rather than creating another super C2C AI healthcare application. Wu Wenda even believes that specialized C2C disease models and digital doctors represent a new bubble period in medical AI.

Under this framework, Tencent Health is divided into three business lines: The B2B side provides digital solutions for medical institutions, pharmaceutical companies, and medical device firms, monetizing the underlying capabilities of Tencent Cloud through tools; the B2C side is responsible for businesses oriented toward individual users, such as the Tencent Health mini-program, WeChat medical insurance payments, and electronic health cards; and the R&D departments, such as the Tencent Life Sciences Lab, focus on cutting-edge research in the life sciences, including AI applications in drug R&D and gene sequencing, as well as the R&D and iteration of medical large language models.

Of course, the strategy beyond B2B and B2C is not a story that will yield short-term results. Tencent is attempting to answer a more fundamental question:

How can a Chinese internet giant transform its core capabilities into sustainable, strategic advantages in the realms of hard technology and life sciences?

Technology and money have never been constraints for internet giants, but time and patience are luxuries. As AI begins to crack the code of life, Tencent's grand gamble is just beginning.