China AI industry: Scale, Infrastructure and Commercial Ecosystem

The China AI industry is no longer confined to research labs; it is now a core driver of global technological and industrial change. In China, AI plays a central role in economic upgrading. National planning, policy frameworks, and close collaboration between industry, academia, and research institutions support this development. This accelerates the integration of AI into real industrial applications. It also attracts global technology companies and innovation resources into the ecosystem.

Today, China’s AI landscape is defined by scale, infrastructure depth, and widespread industry adoption — a combination that signals a transition from early growth to commercial maturity.

An Industry That Has Already Entered the Scale Stage

China’s AI industry has moved beyond experimentation and into a phase of large-scale expansion. In 2024, the industry reached a market size of RMB 269.7 billion, representing 26.2% year-on-year growth, placing China second globally while maintaining a growth rate well above the global average. This reflects not only market momentum but also a broadening base of enterprise adoption.

Generative AI, in particular, has developed rapidly. According to the Report on the Development of Generative AI Applications (2024), China now has more than 4,500 enterprises related to generative AI, with the core segment approaching RMB 600 billion in scale. Over 190 generative large models have completed regulatory filing and are already providing public-facing services. These figures show that generative AI in China has moved beyond pilot projects. It is forming a structured and expanding industrial ecosystem.

The underlying market environment further supports this scale. By the end of 2024, China had 1.108 billion internet users and an internet penetration rate of 78.6%. This vast user base provides a large, diverse, and continuously evolving application environment for AI-enabled products and services.

A Strong Infrastructure Foundation: Computing Power and Industrial Capacity

The growth of AI in China is supported by a rapidly strengthening infrastructure base. Under the national “Eastern Data, Western Computing” initiative, China has built a nationwide computing network architecture. It has also formed a four-layer AI industry structure covering infrastructure, frameworks, models, and applications.

China’s total computing power has reached 230 EFLOPS, ranking second globally, while intelligent computing power now accounts for over 30% of the total. This provides substantial support for model training, AI research, and large-scale application deployment. According to IDC forecasts, China’s intelligent computing capacity is expected to reach 1,037.3 EFLOPS in 2025 and grow to 2,781.9 EFLOPS by 2028, with a compound annual growth rate of 46.2%, driving further demand for high-performance chips, servers, and related infrastructure.

Beyond computing, China’s advanced manufacturing capabilities also play a critical role. The country has remained the world’s largest industrial robot market for 11 consecutive years, and holds more than 190,000 valid robotics-related patents, accounting for roughly two-thirds of the global total. From industrial production to medical procedures, commercial services, and household applications, robotics is expanding across diverse real-world scenarios.

AI Deeply Integrated Into Industrial and Service Sectors

China increasingly embeds AI into real economic sectors rather than keeping it as a standalone technology domain. Industrial digitalization has accelerated significantly.

China has cultivated 421 national-level intelligent manufacturing demonstration factories and more than 10,000 provincial-level digital workshops, with AI and digital twin technologies applied in over 90% of these demonstration facilities.

At the same time, AI applications are expanding across multiple industries. Office scenarios, healthcare, education, and finance have all seen the development of AI-enabled solutions and industry-specific models. AI terminals are also becoming more prevalent, including AI-enabled smartphones, computers, audiovisual devices, and in-vehicle systems. These trends illustrate how AI is moving from isolated deployments to a broad, cross-sector innovation ecosystem.

Long-Term Growth Trajectory

The industry’s current scale is only part of a longer-term trajectory. Industry forecasts project that by 2035, China’s AI industry will reach RMB 1.7 trillion, accounting for 30.6% of the global total, making China the largest AI market worldwide. Combined with ongoing advances in generative AI and computing power, this suggests sustained expansion across both core technologies and application-driven segments.

China’s AI sector today is characterized by rapid scale expansion, a maturing full industry chain, strong computing and manufacturing foundations, and deepening integration into industrial and service environments. These elements together mark a shift from early-stage growth to a more comprehensive commercial ecosystem, where technology, infrastructure, and application scenarios are evolving in parallel.

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