Pony AI Stock Tumbles Despite Tencent Robotaxi Deal, But Shares Hold 50% Weekly Surge

synopsis

Pony AI (PONY) stock broke its two-day rally to fall more than 9.5% in midday trade on Friday despite announcing a new strategic partnership with Tencent to accelerate the development and deployment of autonomous driving technologies.

Meanwhile, U.S.-listed shares of Tencent (TCEHY) were up 1.2%. 

Under the agreement, Pony AI will collaborate with the Shenzhen-based tech giant on cloud computing, mapping, and in-car ecosystem integration. 

The partnership aims to bolster Pony AI’s robotaxi rollout by leveraging Tencent’s digital infrastructure, including Tencent Cloud and the popular WeChat app.

The integration will enable users in Shenzhen to book Pony AI Robotaxi rides directly through Weixin Mobility Services, embedded within WeChat, which has over one billion monthly active users. 

The companies will also co-develop in-car experiences and operational tools to enhance passenger engagement.

Beyond the consumer-facing elements, the partnership includes the joint development of a high-performance simulation platform. 

Pony AI plans to use Tencent’s big data, AI, and cloud capabilities to strengthen its proprietary virtual testing environment, PonyWorld. The company said its goal is to enhance the training of its autonomous systems for real-world complexity.

Despite Friday’s decline, Pony AI stock remains up more than 50% for the week. The shares rallied after the company unveiled its seventh-generation driving system, along with three new robotaxi models developed in collaboration with Toyota, BAIC, and GAC, at the Shanghai International Automobile Industry Exhibition on Wednesday.

Pony AI CEO James Peng called the partnership a “huge step” in scaling operations, citing Tencent’s massive reach and technical depth. Tencent Vice President Zhong Xiangping said the collaboration “marks a new starting point for collaborative innovation.”

The deal arrives as Pony AI faces financial pressure. In its most recent quarter, revenue from its Robotaxi business fell 62% year-over-year to $2.6 million.

Pony AI’s stock is down nearly 53% year-to-date and trades roughly 70% below its February peak of $23.88.

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