Taiwan Semiconductor Manufacturing Co. risks giving up its lead over Tencent Holdings Ltd. as Asia’s biggest company by market value, with investors focused on the latter’s artificial intelligence plans.

TSMC shares have dropped 11% this year, falling alongside global chip stocks like Nvidia Corp. as concerns mount over the sector’s frothy valuations. Meanwhile, Tencent shares have gained roughly 30% in 2025, helping the internet giant narrow its market cap difference with TSMC to about $109 billion, the smallest gap since late 2023.

While Tencent’s stock is still a ways off from its 2021 record high, it’s fared better than many of its Chinese tech peers following Beijing’s crackdowns on corporate giants in recent years. On Wednesday, the company outlined plans to sharply raise spending on AI infrastructure after posting its fastest pace of revenue growth since 2023.

Global funds have reduced holdings of TSMC since Feb. 24, shedding a net NT$190.4 billion ($5.8 billion) worth of the Taiwanese stock over the period, according to exchange data compiled by Bloomberg. Foreign holdings in TSMC shares dropped to 72.7% as of Wednesday, the lowest since late 2023.