"Beijing’s approach to A.I. is intended to help Chinese tech companies make advancements despite Washington’s restrictions.
In the United States, companies like Google and Meta have spent billions on data centers. But in China, it is the government that has played a major role in financing A.I. infrastructure and hardware, including data centers, high-capacity servers and semiconductors.
To concentrate the country’s engineering talent, the Chinese government also financed a network of labs where much of its most advanced A.I. research takes place, often in collaboration with big tech companies like Alibaba and ByteDance.
Beijing has also directed banks and local governments to go on a lending spree that fueled hundreds of start-ups. Since 2014, the government has spent nearly $100 billion on a fund to grow the semiconductor industry, and in April said it would allocate $8.5 billion for young A.I. start-ups.
Local governments have set up entire neighborhoods that function as start-up incubators, like Dream Town in Hangzhou, a city in China’s south that is home to Alibaba and DeepSeek and is known as a hot spot for A.I. talent.
“For the government to help us cover even 10 or 15 percent of our early-stage research costs, that’s a huge benefit,” said Jia Haojun, the founder of Deep Principle, a Hangzhou start-up focused on using A.I. for chemical research that raised $10 million last year.
Different city districts offer competing incentives to lure start-ups to their areas. Deep Principle received a $2.5 million subsidy from a district in Hangzhou when the start-up moved to the city, Mr. Jia said. A local official helped him find office space and employee housing."
https://www.nytimes.com/2025/07/16/technology/china-ai.html
