Tencent Holdings Ltd's investment in electric car maker Tesla Inc, announced on Tuesday, highlights the internet giant's strategic focus in artificial intelligence-backed applications, notably in the realm of smart vehicles, experts have said.

The Chinese internet conglomerate scooped up 5 percent of Tesla's shares for around $1.78 billion to become its fifth-largest shareholder, according to a filing to the United States Securities and Exchange Commission.

Tencent is bullish on Tesla's new technologies, "including electric cars, assisted driving and shared vehicles", according to a company statement to China Daily on Wednesday.