China has U.S. chip giants Nvidia (NVDA) and Broadcom (AVGO) in its sights after it revealed details of a huge $8.2 billion AI funding program.
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Chinese Self-Sufficiency
The state-backed AI Industry Investment Fund will, according to the South China Morning Post, be dedicated to early-stage AI projects. But a large focus will be on developing semiconductor expertise to help make China more independent when it comes to chip production.
Indeed the new fund draws contributions from Phase III of the China Integrated Circuit Industry Investment Fund—also known as the “Big Fund”—which was set up last year to boost China’s chip industry toward self-sufficiency.
According to the Chinese government the AI fund will look to make investments throughout the AI supply chain touching areas such as computing power, algorithms, data and applications. Robotic technology will be another key focus.
This comes at a time of increased tension between China and the U.S. over trade tariffs and export restrictions on Western technology such as advanced semiconductors, as well as intense competition between the world’s two largest economies over the race to develop AI.
China’s AI Aims
Beijing is committed to accelerating its AI ambitions.
According to a report in TechInAsia, China accounted for 48% of global AI startup funding in 2017, surpassing the US’s 38%. China’s broader New Generation AI Development Plan aims to create a $150 billion AI industry by 2030 and it is expected to generate $7 trillion of the $15.7 trillion in global wealth that AI is forecasted to create by 2030.
The fund reveals, of course, the two different economic strategies driving the AI advance. The state supported Chinese model and the private-led approach of U.S. tech.
U.S. firms have already been surprised once this year with the emergence of DeepSeek and its low-cost AI technology. Stocks like Nvidia, Broadcom and Microsoft (MSFT) have been warned what increased Chinese independence can produce.
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