Company is competing against rival Alibaba.
Chinese Internet company Tencent Holdings is jumping onto the cloud computing bandwagon with a ¥10bn ($1.57bn) investment over the next five years.
As part of the initiative, the company also plans to construct and operate data centres in China, Hong Kong and North America.
The company is into online games and social networks and also operates data centres that are home to servers and other equipment.
It generated $12.4bn in annual revenue last year and is expected to invest $315m in the cloud business every year for the next five years.
Chinese tech titans are investing a lot into cloud computing and data centeres, as in March Tencent rival Aliyun opened its first data centre outside of China in Silicon Valley.
The new data centre by the cloud computing division of Alibaba would initially provide services to overseas Chinese businesses that deal with retail, gaming and internet, and conducts operations in the US.
Alibaba is also planning to expand its presence with new data centres in Europe, China and Hong Kong.
According to reports, Tencent and Alibaba’s cloud services would only account for only a fraction of their revenues but according to industry analysts the businesses is expected to expand in the coming years, reported Wall Street Journal.