STaking to the stage in Hangzhou, the technology capital of eastern China, Alibaba’s normally media-shy CEO made an attention-grabbing announcement. “Today’s world is witnessing the dawn of an AI-driven intelligent revolution,” Eddie Wu said at a developer conference in September. “Artificial general intelligence (AGI) will not only amplify human intelligence, it will unlock human potential and pave the way for the arrival of artificial super intelligence (ASI).”
Wu said ASI will “tack on unsolved scientific and technological problems at unimaginable speed” and “has the potential to create generations of ‘super scientists’ and ‘full-stack super engineers.'”
Mr Wu also announced plans to invest 380bn yuan (£40bn) in AI infrastructure over the next three years, news that sent Alibaba shares soaring to their highest level in almost four years.
Wu’s foray into the existential techno-frontier rhetoric typically deployed by Western tech CEOs such as OpenAI’s Sam Altman and DeepMind’s Demis Hassabis caught the attention of observers. “Wu’s ASI speech is a milestone,” technology writer Aphra Wang wrote in China’s AI newsletter Concurrent. “China’s leading companies are beginning to articulate their own grand visions that are like prophecies of the future.”
AGI is a theoretical state of AI in which highly autonomous systems can perform human tasks, and is of interest to US technology companies such as OpenAI and DeepMind. Many see it as the next frontier of civilization, and we are competing with each other and with China to get there. In May, Microsoft President Brad Smith told the U.S. Senate AI Committee that “the competition between the United States and China for global influence is likely to be won by the earliest mover.”
Many people in Washington have internalized these fears. The U.S.-China Economic and Security Review Commission recommended that Congress “establish and fund a Manhattan Project-like program dedicated to acquiring and competing in artificial general intelligence (AGI) capabilities.” The Manhattan Project was a research effort to create nuclear weapons during World War II.
Many in China saw Wu’s speech as articulating a vision for a bold and unusual technology company, but not representative of China’s AI industry as a whole.
“There are certainly research groups in China working on AGI, but most AI companies are working towards better applications,” said Zhang Yaqin, director of Tsinghua University’s AI Industry Research Institute and former president of tech company Baidu.
A combination of limited computing power, a pragmatic approach to technology, and a keen awareness of AI’s potential today has led China’s national AI policy to be oriented toward real-life applications rather than frontier research.
In August, the Chinese government announced its long-awaited “AI+ Strategy.” The policy document outlines how using AI to improve medical diagnostics, streamline supply chains, and more can accelerate China’s development goals. However, AGI was not mentioned.
“The Chinese government is keenly focused on reaping the benefits of AI now and in the near future through its widespread use and application across economic, social, national defense, and other sectors,” said Julian Gewirtz, former White House National Security Council senior director for China and Taiwan. “Despite its goal of ‘catching up and overtaking’ the United States, one should not assume that the Chinese Communist Party accepts the idea that AGI is imminent.”
Chinese technology analyst Selina Xu said, “If you look only at what has been officially announced, there is no clear understanding of AGI at all.” Xu pointed out that Chinese leader Xi Jinping has a history of favoring material economics over intangible power.
“It’s a very different story than the AGI race as many in Washington, D.C., see it,” Schuh said.
One of the biggest factors guiding this strategy is the fact that US sanctions are preventing Chinese companies from obtaining the world’s most sophisticated semiconductors needed for advanced AI research.
The US government has banned the sale of high-tech microchips to China in an effort to curb China’s AI development. Nvidia, one of the world’s leading chipmakers, then developed a more basic semiconductor specifically for the Chinese market. In December, Washington approved Nvidia’s second most advanced chip, the H200, for sale in China. However, the Chinese government has reportedly told customs officials that the chip cannot be imported into China as it seeks to break its dependence on foreign technology.
China argues that “necessity is the mother of invention” and points to the success of companies like DeepSeek as evidence that U.S. regulations only foster innovation. DeepSeek founder Liang Wenfeng, like Alibaba’s Wu, is one of the few Chinese technology leaders to openly express interest in AGI.
But until China can produce its own advanced semiconductors at scale, most tech companies find it more profitable to use the hardware they already own to focus on AI applications rather than AGI.
Another factor guiding the U.S.-China technology race is the availability of data centers and the energy to power them. Nvidia CEO Jensen Huang said in November that China would “win the AI race” thanks to energy subsidies for data centers.
The subsidies were reportedly introduced after Chinese tech companies complained that their electricity bills were higher because they were required to use domestically produced semiconductors that were less efficient than Nvidia’s. In a sign of China’s determination to end its dependence on imported technology, Reuters reported that state-funded data centers can only use domestically produced chips.
These measures would reduce Nvidia’s competitive advantage in China and give a boost to domestic chipmakers such as Huawei.
Since 2021, China has reportedly poured $100 billion into supporting AI data centers.
But there are signs that the boom may have gone too far. According to a recent report from the China Academy of Information and Communication Technology, the utilization rate of AI data centers nationwide was 32%.
In a recent editorial in China Economic Weekly, Lao Xiaoyan, director of the China Telecommunications Research Institute, wrote that in some parts of China, the computing power industry operates in a manner similar to China’s beleaguered real estate sector: build first and find a buyer later. He warned against “blind building of intelligent computing centers” and said regional computing capacity needs should be considered before building new data centers.
Despite a surplus of more general computing power, many experts believe that China does not yet have chips sophisticated enough to explore the frontiers of research in AGI. But analysts say the mood could change quickly.
“The current situation is very fluid, and Xi Jinping has clearly declared his ambition to lead the world in AI,” Gewirtz said. “So the fact that China is interpreting its goals unilaterally at this snapshot moment does not reassure me that it will interpret it the same way a year from now.”
Additional research by Lillian Yang
