Given the explosive growth of artificial intelligence on an industrial scale and the fact that approximately one-third of China’s AI professionals live in Shanghai, the city is rapidly establishing itself as an AI hub, especially in the integration of AI and manufacturing, a recent report said.
As of December 24th, a total of 139 large AI models have been registered in Shanghai. The city has nearly 300,000 AI experts, about one-third of the entire national talent pool, according to a report presented at a conference Thursday in Shanghai.
Shanghai’s AI sector is experiencing explosive growth. According to the report, in the first nine months of 2025, the total output of the city’s 394 AI enterprises above the designated size (defined as enterprises with annual revenue of 20 million yuan ($2.86 million) or more) reached 435.49 billion yuan, a 39.6% jump from the previous year. During the same period, the combined profits of these companies reached 40.78 billion yuan, an increase of 11.4% year-on-year.
Wu Xiaodong, vice president of the Shanghai Industrial Internet Association, said the report concludes the progress of building a modern industrial system in Shanghai, focusing on policy development, application scenarios with technological breakthroughs, and ecosystem development.
“The white paper systematically reviews Shanghai’s practical experience and implementation model in AI manufacturing, analyzes opportunities and challenges, and provides policy recommendations,” Wu said.
“Shanghai will promote the large-scale development of AI manufacturing during the 15th Five-Year Plan (2026-30),” said Zhang Ying, deputy secretary-general of the Shanghai municipal government.
Through coordinated efforts across industry, academia, research and application fields, Shanghai is advancing industrial models, industrial intelligent agents and intelligent equipment products. These efforts are driving innovation in manufacturing organization models, deepening the integration of scenarios, and forming an innovation framework that connects technologies, application scenarios, and ecosystems, Zhang said.
Businesses are realizing many tangible benefits from implementing AI. “AI applications have proven to be very effective in accelerating the design process, shortening product delivery times, reducing costs, and increasing success rates,” said Gu Guifeng, vice president of Shanghai Kaiquan Pump (Group) Co., Ltd.
“Take traditional hydraulic model design as an example. Previously, it could take researchers with 10 to 15 years of experience at least a month to design multiple models and perform optimization tests, and at least a week just for simulation calculations. With the help of AI, engineers can now design the most effective hydraulic model within 24 hours,” Gu said.
AI also achieved significant cost savings, as developing and deploying a high-quality hydraulic model typically requires an investment of more than 3 million yuan. “By making the most of accumulated data and validation results, AI will significantly reduce validation and trial costs,” said Gu.
Yu Fangqiang, chief information officer of Shanghai Construction Group, said that although AI currently only accounts for about 10% of the group’s daily operations, its future possibilities are virtually limitless.
“Although it may take time for the application of AI to move from the consumer sector to the construction sector, companies need to adopt AI aggressively,” Yu said.
Shanghai’s latest AI manufacturing achievements were announced after the Ministry of Industry and Information Technology and seven other central government departments issued guidelines for implementing special measures on AI manufacturing on January 7. The document sets the goal of achieving secure and reliable supply of key AI technologies and world-leading industry scale and empowerment capabilities by 2027.
The guidelines specify a roadmap for achieving AI integration in manufacturing, including widespread adoption of three to five common large-scale AI models in this sector by 2027. Additionally, we aim to drive 500 typical application scenarios, incubate 2-3 leading global impact companies, and build a robust ecosystem for AI-enabled manufacturing. These initiatives are designed to contribute to the global integration of AI and manufacturing, and provide China’s solution to this transformation.
