China's artificial intelligence (AI) sector is experiencing a major surge, with the country now home to over 4,500 AI companies, according to official data (via Xinhua).
The data was revealed at the 2024 World Intelligence Expo in Tianjin by Shan Zhongde, vice minister of industry and information technology.
This photo taken on February 2, 2024 shows Lu Yu, head of Product Management and Operations of Wantalk, an artificial intelligence chatbot created by Chinese tech company Baidu, showing a virtual girlfriend profile on her phone, at the Baidu headquarters in Beijing. Photo by JADE GAO/AFP via Getty Images
Chinese AI Industry's Rapid Expansion
According to Xinhua, China has established 421 national-level demonstration factories focused on intelligent manufacturing, along with over 10,000 provincial-level digital workshops and smart factories. These facilities are driving innovations in manufacturing, transportation, education, and healthcare.
Wu Zhaohui, the vice president of the Chinese Academy of Sciences, mentioned that the innovations like brain-computer interfaces and humanoid robots will have practical impacts across various industries.
"AI technology can also inject transformative power into regional economic growth and reshape the landscape of global competition," Wu added.
In 2023, the China's core AI industry reached a value of over 578 billion yuan (approximately $81 billion), reflecting a 13.9% increase from the previous year. This growth is part of the government's AI Plus initiative, which aims to expand the digital economy and modernize manufacturing sectors.
The rapid expansion of China's AI sector has led to intense competition among AI companies, particularly in the development of large language models (LLMs). The Economist reports that China now boasts over 100 LLMs with more than a billion parameters, putting them on par with some of the world's leading models.
This competitive landscape has resulted in significant price wars among major players. Companies like High-Flyer, ByteDance, Alibaba, and Baidu have dramatically reduced prices for their AI models, some by as much as 97%.
Baidu, for instance, announced that its Ernie chatbots would be free of charge for all business users. This aggressive pricing strategy aims to attract more customers and gather more data for training algorithms, but it also risks reducing revenues needed for further development.
AI Sector Braces for International Sanctions
Despite these advancements, the China's AI sector faces challenges from international sanctions, particularly from the United States.
The Global Times reports that the US is pressuring Japan and the Netherlands to impose restrictions on China's semiconductor sector, specifically targeting high-bandwidth memory (HBM) chips, which are crucial for AI hardware ecosystems.
The Chinese officials have criticized these moves, arguing that they aim to maintain the US technological hegemony and disrupt global industrial stability.
The future of China's AI sector appears promising, with projections indicating that the Chinese AI economy could have a value of around two trillion yuan in revenue in 2026.
