Photo by Sanketh Rao on Pexels

Driven by intensifying competition with the United States and ongoing technology restrictions, China is significantly escalating its investments in artificial intelligence to achieve self-reliance. Numerous major Chinese cities are rolling out substantial subsidy programs designed to strengthen their domestic AI industries and minimize reliance on US-developed technology.

Shanghai is leading the charge with a ¥1 billion (US$139 million) subsidy program. The package will provide funding for computing power, offer discounts on third-party AI models, and support companies acquiring critical training datasets. Similar initiatives are being launched by Hangzhou, Shenzhen, Chengdu, and Beijing, indicating a unified strategy across various levels of the Chinese government to prioritize AI development.

This domestic push occurs against the backdrop of continued US restrictions on the export of key technologies. Despite these limitations, experts forecast considerable expansion within China’s indigenous AI sector, projecting that domestically produced chips will secure a progressively larger portion of the AI accelerator market by 2027.

Speaking at the World Artificial Intelligence Conference in Shanghai, Premier Li Qiang advocated for global cooperation, emphasizing that AI should not become an “exclusive game.” However, the ultimate outcome of this technological rivalry hinges on the effectiveness of US restrictions compared to the impact of China’s dedicated self-reliance initiatives. Analysts believe this competition will shape the trajectory of the AI landscape for the foreseeable future.