Tencent’s well-known ‘horse racing’ programme, launched two decades ago, encourages multiple teams to independently and proactively develop similar products, fostering competition for internal resources and more innovation efforts. This approach has led to major innovative and successful products like WeChat and Honor of Kings. This chapter argues that Tencent’s innovation thrives on a dynamic mix of internal competition and cooperation – what we term ‘coopetition’. While often overlooked by scholars and underestimated by business leaders, coopetition at Tencent has proven central to generating creative ideas, energising teams, and enabling cross-functional knowledge recombination. Remarkably, this process was not designed by executives through a top-down mechanism but rather happened naturally from Tencent’s culture of autonomy and tolerance for risk. Rich interview evidence reveals how coopetition enhances individual growth, team development, and product competitiveness, contributing to Tencent’s overall innovation capacity.