To compete with America, China warns AI companies: Stop disorderly…
China is signaling a strategic shift in its approach to the booming artificial intelligence sector, with top officials announcing plans to prevent what they call “disorderly competition” and wasteful investment. The move, announced by the country’s top economic planner, suggests that Beijing is prioritizing coordinated, efficient development even as it aims to make AI a cornerstone of its economy. During a recent briefing, Zhang Kailin, an official with the National Development and Reform Commission (NDRC), stated the government will guide provinces to develop AI in a more coordinated and complementary way. “We will resolutely avoid disorderly competition or a ‘follow-the-crowd’ approach,” Zhang said, emphasizing that development should be rooted in local advantages, resources, and existing industrial foundations.
Chinese President Xi Jinping’s AI warning to local governments
These comments echo concerns previously voiced by Chinese President Xi Jinping, who cautioned against excessive local government spending on AI. The coordinated approach reflects a broader effort by policymakers to avoid the pitfalls of overcapacity that have plagued other rapidly expanding sectors, such as electric vehicles, and contributed to deflationary pressures.Beijing has positioned AI as a critical new growth engine for the world’s second-largest economy, viewing it as a key battleground in its technological competition with the United States. This national ambition has fueled a frenzy of public and private investment, with Chinese firms reportedly targeting the installation of over 115,000 Nvidia AI chips in data centers across the country’s western regions, according to a Bloomberg News analysis.
Plan to nurture DeepSeek-like startups
Earlier this week, the government released an action plan to accelerate AI development, application, and governance. The NDRC further elaborated on this proposal, promising improved national-level planning and increased support for private companies. The commission expressed a desire to nurture more “dark horses” for innovation, a likely nod to the recent rise of Chinese startups like DeepSeek.DeepSeek, a company that has recently gained global attention for its powerful and cost-effective AI model, has become a symbol of the domestic AI boom. The company’s rapid ascent has intensified the race among Chinese firms to secure the necessary hardware and talent to compete on a global scale.The government’s new directive aims to harness this momentum while ensuring resources are allocated strategically rather than duplicated in a race to keep up with rivals. By encouraging provinces to specialize and collaborate, China hopes to build a robust and sustainable AI ecosystem that can support its long-term economic and technological goals. This policy shift underscores Beijing’s commitment to steering its AI industry toward a more mature and strategically sound future, seeking to turn the AI frenzy into a well-managed technological pillar.
