Tencent Holdings (HKG:0700, OTC:TCEHY) Ltd and Honor Devices Co have unveiled a long-term partnership around cloud and artificial intelligence (AI) development.

Chinese smartphone maker Honor will adopt Tencent's cloud infrastructure under the deal, including for the likes of analytics and search tools.

Tencent, China's most valuable company, and Honor will also jointly develop a coding assistant to aid the latter's software engineers.

Tencent shares had surged earlier this week on reports it was in discussions with Apple Inc (NASDAQ:AAPL, ETR:APC) to provide generative AI tools for iPhones.

The deal with Honor marks Tencent's latest effort to find business partners for its AI products.

Honor had been spun out of Huawei in 2020 and has since eyed a public offering, with the agreement coming after it sold stakes in China Mobile Ltd and China Telecom Corp this year.

Tencent shares climbed by 2.8% on Friday.