Tencent Holdings Ltd. is making a big bet on electric vehicles.

According to a filing submitted to the U.S. Securities and Exchange Commission today, the Chinese technology giant has acquired a 5 percent stake in Tesla Inc. for $1.78 billion. The investment includes 8.12 million shares that Tencent bought on the open market and through a public offering that the car maker held earlier this month to strengthen its balance sheet. The sale raised $1.2 billion that will go toward footing the production costs of the much-anticipated Model 3 sedan (pictured).

Reuters reports that Tencent is now the fifth-largest shareholder in Tesla behind Elon Musk, Fidelity Investments, Baillie Gifford & Co. and T. Rowe Price Group Inc. Today’s stock purchase is the latest in a series of high-profile investments that the Chinese company has made as part of its efforts to reach more parts of the technology world.

Tencent previously bought a stake in mobile messaging powerhouse Snap Inc. and acquired Riot Games, one of the world’s leading game studios. The Chinese giant has also made a number of bets in the auto industry along the way that focused mainly on the burgeoning autonomous vehicle segment. Among others, it’s backing a Shenzhen-based startup called Future Mobility Corp. that is working toward delivering an autonomous electric car by 2020.

The Chinese giant also has been working to build up its own artificial intelligence capabilities. On Friday, it announced a deal to use Nvidia Corp.’s latest graphics processing unit chips, which are widely used in machine learning.

Today’s investment in Tesla is a natural extension of Tencent’s efforts to monetize the rise of driverless vehicles. The car maker is one of the few in the auto industry with a working autonomous navigation system that has been proven to work on the road. In fact, a recent investigation by the U.S. Department of Transportation found that the company’s Autopilot system has helped reduce crashes by 40 percent for customers.

Tencent’s $1.78 billion endorsement expresses a great deal of confidence that Tesla can maintain its position amid increasing competition from mainstream auto companies. News of the investment sent the car maker’s stock up about 3 percent in trading today.

Image: Tesla