Tencent’s AI Lag Fuels $173 Billion Stock Rout as Rivals Thrive

China’s most-valued company is losing favor with equity investors on concern it is falling behind in the nation’s increasingly competitive artificial intelligence race.

Shares of Tencent Holdings Ltd. have slumped nearly 11% in Hong Kong this year, trailing a broader tech gauge. They fare even worse when compared to Alibaba Group Holding Ltd. and Baidu Inc. — both of which have seen their shares rise in part due to optimism over their AI apps. In all, $173 billion in market value has been wiped out since Tencent’s stock reached a more than four-year high in early October.