China Invests Billions to Become a Global Artificial Intelligence Superpower
By Meaghan Tobin, Reporting from Taipei, Taiwan
Published July 16, 2025
China is intensifying its efforts to emerge as a dominant force in artificial intelligence (AI), investing billions of dollars and adopting an industrial policy approach aimed at closing the technology gap with the United States. This strategic push reflects Beijing’s ambition to rival or surpass global leaders in the development of AI systems that mimic human intelligence.
A Decade of Focus and Investment
Over the past ten years, China has methodically funneled vast resources into AI development, employing strategies similar to those that propelled its dominance in industries like electric vehicles, solar power, and battery production. By fostering domestic manufacturing capabilities and nurturing homegrown talent, China has transformed from a technology importer to a major producer and innovator in advanced AI technologies.
Kyle Chan, an adjunct researcher at the RAND Corporation, explained, “China is applying state support across the entire A.I. tech stack, from chips and data centers down to energy.” This state-driven approach ensures control over critical components such as computational hardware, data infrastructure, and the skilled engineers necessary to build sophisticated AI models.
Local Governments and AI Innovation Hubs
Chinese municipalities have played a vital role in this AI surge, establishing innovation centers to stimulate startup growth and talent development. One example is Dream Town in Hangzhou, home to tech giants like Alibaba and AI startups such as DeepSeek. These hubs foster collaboration and innovation, attracting a growing pool of skilled engineers and researchers.
Responding to Global Restrictions
When OpenAI restricted access to its advanced AI systems in China last July, many Chinese developers pivoted swiftly towards open-source AI platforms. Notably, several domestic companies, including DeepSeek and Alibaba, have since produced AI models that rank among the world’s leading open-source systems. This development underscores China’s commitment to technological self-reliance and leadership despite geopolitical challenges, including U.S. restrictions on sales of advanced AI chips like those produced by Nvidia.
Strategic Industrial Policy
China’s AI ambitions form part of a broader industrial policy that encourages self-sufficiency in critical technologies. This approach aims to build a fortified domestic ecosystem capable of sustaining innovation and reducing dependence on foreign suppliers, especially amid increasing technological rivalry with the United States.
The government’s sustained investment in AI infrastructure and talent development seeks not only to foster commercial success but also to secure national strategic advantages in AI applications ranging from industry to defense.
Looking Ahead
As China continues to scale its AI capabilities, the global race for artificial intelligence supremacy is intensifying. Through its combination of targeted state support, industrial policy, and robust innovation ecosystems, China is rapidly advancing toward its goal of becoming a leading AI superpower.
This article is based on reporting for The New York Times.
