China’s AI Boom Fueled by Thousands of Companies Registered by Government
China is experiencing a significant boom in artificial intelligence (AI), spurred by the registration of thousands of AI companies since 2023. The Cyberspace Administration of China (CAC) oversees this growth by requiring developers to list their AI applications in a public database known as the algorithm registry. This initiative aims to regulate AI tools with potential societal impacts and ensure compliance with local laws.
China’s AI Regulation Landscape
Before launching an AI tool, developers must submit their products for approval. The CAC mandates that applications adhere to stringent guidelines, avoiding 31 different risks, such as discrimination and psychological harm. This regulatory framework ensures that each tool is vetted before being publicly available.
The Role of the CAC
- The CAC processes submissions via local branches, such as the Shanghai CAC for companies based in Shanghai.
- Key entries in the algorithm registry include AI tools for various applications, including healthcare and community services.
- The CAC has effectively created a comprehensive overview of China’s AI ecosystem, unlike regulatory systems in the European Union or the United States.
Geographical Distribution of AI Registrations
Nearly 80% of generative AI registrations are concentrated in major tech hubs: Beijing, Shenzhen, Shanghai, and Hangzhou. Each city specializes in different aspects of AI:
- Beijing: Innovation driven by elite universities and national labs.
- Shenzhen: A dense supply chain and engineering talent.
- Shanghai: Focused on commercialization and synergy with multinationals.
- Hangzhou: Boosted by Alibaba’s extensive e-commerce network.
Other regions like Chongqing and Hefei are also emerging as AI hubs, with investments in manufacturing and speech technologies.
State-Linked and Foreign Involvement
According to recent data, 22% of AI filings are from state-linked enterprises. These partnerships with major technology firms are common. For instance:
- PetroChina collaborates with Huawei and iFlyTek for oil and gas solutions.
- State Grid utilizes DeepSeek for optimizing power grid management.
In contrast, foreign companies constitute merely 0.5% of total registrations, with Walmart’s AI for retail appearing on the list.
The Competitive Landscape and Startups
The Chinese AI market boasts diverse players. Unlike the US, where a few companies dominate, China’s landscape remains contested. The emergence of six key companies, referred to as the “AI tigers,” shows a consolidation trend.
- Notable AI Tigers: Moonshot, Minimax, Zhipu, Baichuan, 0.1AI, and Stepfun.
Innovative Startups
Startups are actively pioneering AI applications across multiple sectors. For example:
- Squirrel AI: An ed-tech company adapting its AI platform to address the needs of 1.2 million students through personalized learning.
- AI Kanshe: This startup merges traditional Chinese medicine with machine vision to diagnose health conditions via tongue and facial images.
- Zhongtan Puhui Cloud Technology: An enterprise focused on automating carbon accounting tasks, catering to a wide range of clients from industries to small exporters.
As the landscape evolves, China’s AI registry continues to grow, showcasing the country’s commitment to innovation and regulation in artificial intelligence.
