Tencent Holdings Ltd's chairman Pony Ma said on Monday that the company has launched a new artificial intelligence-driven social feature called "Yuanbao Pai" on its Yuanbao app, as China's tech giants step up competition in generative AI.

The announcement came a day after Tencent said it would kick off a Lunar New Year campaign on Monday, distributing cash red envelopes totaling 1 billion yuan (about $138 million) to Yuanbao users, as part of broader efforts to increase activity on its digital platform.

Ma explained that the new feature allows users to create or join "pai" — groups where AI not only participates as a member to boost interaction with users but also serves as a shared social space for activities such as watching films or listening to music together. The functionality is designed to deepen social engagement with AI and expand the role of chatbots beyond simple conversations.

The move comes as competition between China's largest tech companies intensifies in the AI race. On Monday, Baidu Inc announced a similar initiative, offering users of its flagship app a share of 500 million yuan in rewards if they use its AI assistant from Jan 26 through March 12. The incentive mirrors broader industry tactics to drive rapid adoption of large-language model tools.

Alibaba Group Holding also revealed it has fully integrated its Qianwen app into the wider Alibaba ecosystem, positioning the product to evolve from a chat tool into an "intelligent agent" to help users with a complete range of online tasks—from shopping to digital services—using natural language.