BEIJING — China is showing renewed momentum in its artificial intelligence sector, driven by government initiatives and industry developments, officials and industry reports said on Thursday.
The country is preparing to invest around 2 trillion yuan (about $295 billion) over the next five years in a nationwide network of data centers to support AI infrastructure, according to people familiar with the planning process cited by Bloomberg News. State-owned enterprises such as China Mobile and China Telecom are expected to play a leading role in the buildout, relying primarily on domestic suppliers including Huawei for AI chips and related technology.
This push aligns with the government's "AI+" initiative launched in August 2025, which aims to integrate artificial intelligence across industries, and the forthcoming 15th Five-Year Plan that emphasizes AI as part of efforts to develop new quality productive forces.
Chinese AI models have demonstrated significant progress. In early 2025, DeepSeek's R1 model achieved performance levels that briefly matched leading U.S. models, contributing to a narrowing of the gap between Chinese and U.S. frontier AI capabilities, according to the Stanford AI Index Report 2026. As of early 2026, the performance difference between top models from the two countries had effectively closed in key benchmarks.
China leads globally in AI research publications, citations, and patent grants, while the United States maintains an edge in producing notable high-impact models and certain patents, the report stated. Forbes China released its 2026 AI TOP 50 list in May, highlighting companies across expanded categories including global expansion and open-source contributions.
The government has promoted open-source AI models as part of its strategy, with companies like DeepSeek and Alibaba's Qwen series gaining international attention for efficiency and accessibility.
Regulatory measures have also shaped the sector. In April 2026, authorities instructed several leading AI startups, including Moonshot AI and StepFun, to seek government approval before accepting U.S. investment, amid broader efforts to manage technology flows and national security concerns, Bloomberg News reported.
"AI integration is key to transforming our industrial capabilities and addressing economic challenges," a commerce ministry spokesperson said in a recent statement on measures to promote AI applications in consumption.
As of June 2026, the sector continues to expand amid international competition and domestic policy support. The Ministry of Commerce announced 17 measures in mid-June to enhance AI use in products and services for households and businesses.
Details on the exact implementation timeline for the large-scale data center plan and its full impact remain under development, officials said. Industry observers noted ongoing advancements in model capabilities and infrastructure, with further updates expected in the coming months.
