Tencent launches Hy Image 3.5 AI image model to compete with ByteDance and Alibaba in China

On September 22, 2026, Tencent Holdings launched its latest image-generation model, Hy Image 3.5 Preview, in China. The release coincided with Alibaba's AI conference and signals Tencent's intent to catch up with industry leaders like ByteDance. The model is being integrated across Tencent products, including the Yuanbao chatbot and design tools. Tencent tested the model with hundreds of in-house designers and claims it performs on par with ByteDance's Seedream 5.0 Pro and slightly better than Google's and Alibaba's latest models. The company has recently hired former OpenAI researchers to boost its AI capabilities.