China Eyes $150 Billion AI Industry by 2030 with $8.2 Billion Investment Fund

China has launched a $8.2 billion AI fund to strengthen its domestic artificial intelligence ecosystem and reduce reliance on U.S. semiconductor giants like Nvidia and Broadcom. This state-backed initiative, announced in January by the Ministry of Industry and Information Technology (MIIT) and the Ministry of Finance, will focus on early-stage AI projects while targeting key segments of the AI supply chain. These include computing infrastructure, algorithms, data resources, applications, and robotics.

The 60 billion yuan fund highlights Beijing’s commitment to advancing its AI capabilities through direct government investment, especially as access to Western technologies becomes increasingly restricted. 

A portion of the $8.2 billion AI fund is being sourced from the third phase of China’s Integrated Circuit Industry Investment Fund, commonly referred to as the Big Fund. This fund was established to accelerate China’s chip self-sufficiency, especially amid growing trade tensions and escalating export controls from Western nations. The AI fund will focus on early-stage projects across the entire AI supply chain, which includes crucial areas such as computing infrastructure, algorithms, data resources, and applications.

The fund is managed by Guozhi Investment (Shanghai) Private Equity Fund Management in collaboration with the Big Fund. Zhang Jianhua, a senior official from China’s Ministry of Industry and Information Technology (MIIT), emphasized that this initiative aligns with the country’s broader semiconductor strategy. The AI fund’s creation comes at a time when the U.S. has tightened restrictions on the export of advanced semiconductors to China, increasing pressure on Beijing to bolster its technological independence.

Beijing’s approach to AI development contrasts sharply with the U.S.’s market-driven model, focusing on state-led investment rather than private-sector initiatives. The Chinese government has set targets for its AI sector, aiming for the market to reach 5.6 trillion yuan by 2030. This investment initiative is seen as a critical step toward realizing that goal, with projections suggesting that China could generate nearly half of the global economic value from AI by that time.

The AI Industry Investment Fund also has a specific focus on “embodied AI,” a rapidly growing area that integrates AI systems with physical environments, often through robotics. This area has been identified as a key path for the commercialization of AI, offering promising applications in industries ranging from manufacturing to healthcare. Robotics is expected to be a significant area of interest for the fund, which will support both national and local development projects, particularly in technology hubs such as Shenzhen.

China’s efforts to strengthen its AI industry are already showing significant progress, with companies such as DeepSeek gaining traction. As Beijing intensifies its investments, the growing capabilities of domestic AI firms are creating increasing challenges for U.S. tech giants like Nvidia, Broadcom, and Microsoft. This shift signifies a new phase in global tech competition, as China’s emerging AI sector threatens to challenge U.S. dominance in the field.

During a recent event in Shenzhen, Zhang Jianhua emphasized the importance of developing embodied AI as a key area for commercialization. This type of AI, which integrates intelligent systems with physical environments, is seen as a critical step toward realizing AI’s full potential. Zhang also pledged increased support for local companies in Shenzhen, promising to boost capital, confidence, and capacity for high-quality enterprises.