(Yicai) Aug. 11 -- Shares of Television Broadcasts jumped after Hong Kong’s main terrestrial TV network said it plans to form a joint venture with an affiliate of Gaw Capital Partners to build a subscription-based artificial intelligence computing business, as part of efforts to diversify and broaden its revenue stream.

After surging by as much as 10 percent in the morning, TVB [HKG: 0511] closed 5.4 percent higher at HKD2.72 (35 US cents) per share in Hong Kong today, though the stock has still lost about a third of its value over the past 12 months.

TVB has signed a non-binding agreement with Triton Square to set up the JV which will provide AI computing services to TVB’s member companies and third parties, the producer of Chinese-language programs announced yesterday. They aim to sign a formal deal later this year.

The move is part of a strategic revamp for TVB, which returned to profit last year after a seven-year loss-making streak, as it shifts from traditional broadcasting to being a diversified, digital age media company.

The company has already been pursuing AI-related content initiatives. In June, it revealed a collaboration with ByteDance's Volcano Engine covering AI-assisted film and TV production, short drama production, intellectual property commercialization, and cloud infrastructure. The proposed computing venture takes its AI strategy a step further in the technology’s infrastructure.

TVB will have a 51 percent stake in the JV and Raw Capital, which will invest as much as HKD2 billion (USD255 million), will own the rest. The multi-phase project’s initial stage, with about 10,000 PetaFLOPS of computing power, is targeted to come online in the final quarter of next year.

The JV already has a potential customer in its sights. TVB and Gaw Capital signed a letter of intent on July 15 with a “leading global technology group,” which was not identified. The parties are negotiating the technical and commercial terms while exploring procurement and financing options for the computing equipment needed to provide the service.

Editor: Tom Litting