Artificial intelligence (AI) was an area where China was seen as a follower in the global tech race in the early 2010s. However, ten years later, the country has become a leader in the development of AI and, in that sense, kicked off a new era of technology. This rapid rise was not an accident; it was the result of a highly strategic approach characterized with ambitious government policies, extensive state investment, and a booming tech private sector.

In 2013, the Chinese government took a crucial decision to give AI priority as a corner stone to achieving long term economic and technological success. Currently, China is beginning to lead the global AI market, creating a difficult challenge for Silicon Valley.

China is attaining great progress in AI development by capitalizing on its domestic market of 1.4 billion people, strong government support, clear objectives for developing in AI, and the protection of the market by limiting the influence of Western tech giants such as Facebook and Google, and export of AI in order not to harm its own interests.

AI is being integrated in Chinese daily lives, in a domestic and international manner. This is spear headed by Key players such as Baidu, Alibaba, Tencent and ByteDance-the owner of the popular social media platform TikTok.

In China, where technological innovation is becoming extraordinary, the discussion about the rise of new “Silicon Valleys” in Shenzhen and Beijing is taking place. While California’s Silicon Valley is home to some of the world’s most valuable companies: Apple (over $2.7 trillion), Google (about $1.7 trillion), and Tesla (around $800 billion), which is all well and good, but tech hubs in China are quickly rising. In Beijing, tech giants such as Tencent (over $400 billion in value), ByteDance (over $300 billion), and Baidu (around $60 billion) are dominating social media, AI, and autonomous driving. Huawei in Shenzhen is around a $200 billion company, and DJI leads the drone market.

The breakthrough moment in AI for China arrived with the creation by Liang Wenfang of DeepSeek, a company that shook up Silicon Valley. In December 2024, DeepSeek launched a free, open-source large language model that it developed in just two months, spending under $6 million and using Nvidia’s H800 chips.

This model surpassed competitors like Meta’s Llama 3.1, OpenAI’s GPT-4, Google’s Gemini, and Anthropic’s Claude Sonnet 3.5 in various complex tasks. Such a success despite stringent semiconductor restrictions imposed by the U.S. suggests either an innovative structure to break these barriers or that the export controls were not as hard as anticipated. Because of the app’s intense rise in the global market, it has completely reshaped the AI industry and market dynamics.

DeepSeek is gaining reputation as low cost and effective, offering advanced AI at a fraction of the cost of its competitors. It will also make AI more affordable, thus democratizing it so smaller companies and developers can participate in the AI revolution. The open source model encourages collaboration and accelerates innovation, which in turn, expands the adoption of its technology. DeepSeek pushes the industry giants by putting on tables less expensive hardware and striving for more efficient models.

The introduction of the DeepSeek AI app also caused a market shift and wiped off $1 trillion from the global tech sector. A massive reaction such as this suggested that such a rising contender — even leader — was becoming hard to ignore in the AI sphere. That same year, it also pointed to the possibility of Chinese AI companies coming to disrupt the status quo and reshape the global AI landscape. In addition, the market turbulence also indicates increasing geopolitical importance of AI, which can escalate into a concern that AI is becoming a source of geopolitical tensions.

By 2030, China wants to lead the world in AI, according to its ambitious vision highlighted in the “Next Generation Artificial Intelligence Development Plan”. A key goal of this plan is to establish China as an AI innovation hub, supported by significant investments in research and development (R&D). China wants to expand the scope of AI application across manufacturing, healthcare, transportation, and finance for increasing productivity and competitiveness.

In addition to that, the country is creating top AI infrastructure, such as advance computing power, 5G network, and data center for the development of high technology AI applications. China appreciates the value of data, and it has started to make data more accessible and interoperable, and to create an AI competent workforce through education and training.

China is also developing its governance and regulatory frameworks to address privacy, security and moral concerns in AI. Pushing the tech industry to set worldwide standards and rules on how to handle AI, Chinese leaders are putting AI as a top priority. In addition, China wishes to promote international AI cooperation, mainly with developing countries, in order to achieve global AI development.

As quoted by AI expert Kai-Fu Lee, China wants all sectors and demographics to reap the benefits of AI, “There has been enthusiasm about AI from the technology and business communities but not from the government, that has now spilled over into government policymaking, and reached kindergarten classrooms in Beijing already,” reflecting not only China’s determination to lead in AI but also underscoring a profound shift in how future generations will interact with technology.