China spending big to be an Al superpower

Beijing is taking an industrial policy approach to help its artificial intelligence companies close the gap with those in the United States, writes Meaghan Tobin from Taipei

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When OpenAI blocked China's access to its advanced artificial intelligence systems last July, Chinese coders shrugged. They would rely instead on open-source systems, where the underlying technology is shared publicly for others to build on.

At the time, that mostly meant turning to another popular American product made by Meta.

But in the year since, there has been a major shift in the global race to develop advanced AI. Chinese companies like DeepSeek and Alibaba have churned out open-source AI systems of their own that rank among the world's top performers.

China is quickly closing the gap with the United States in the contest to make technologies that rival the human brain. This is not an accident. The Chinese government has spent a decade funnelling resources towards becoming an Al superpower, using the same strategy it used to dominate the electric vehicle and solar power industries.

"China is applying state support across the entire Al tech stack, from chips and data centres down to energy," said Kyle Chan, an adjunct researcher at Rand Corp, a think tank.

For the past 10 years, Beijing has pushed Chinese companies to build manufacturing capabilities in high-tech industries for which the country previously depended on imports. That approach helped China become the maker of a third of the world's manufactured goods and a leader in electric vehicles, batteries and solar panels. And it has also been applied to the essential building blocks of advanced AI systems: computing power, skilled engineers and data resources.

China pushed that industrial policy approach as three presidential administrations in Washington tried to hold back its ability to make technologies like artificial intelligence, including by restricting sales of chips made by Nvidia, America's leading Al chipmaker.