How AI is booming in China

Having gained his head, 8-year-old Timmy tweeted to himself as he tried to defeat a robot powered by artificial intelligence in a game of chess.

However, this was not an AI showroom or laboratory. The robot lived with Timmy at a coffee table in an apartment in Beijing.

On the first night of his return home, Timmy hugged his little robot friend before heading to bed. He doesn’t have a name for it – yet.

“It’s like a little teacher or a little friend,” the boy said.

After a while, the robot began repositioning the pieces to start a new game as round eyes flashed on the screen, followed by mandarins. “I’ve seen your abilities.

China is embracing AI to become a high-tech superpower by 2030.

Deepseek, the groundbreaking Chinese chatbot that attracted global attention in January, was just the first hint of its ambitions.

Money is poured into AI companies that seek more capital and encourage domestic competition. There are over 4,500 companies developing and selling AI, and schools in the capital will introduce AI courses for elementary school students later this year, while universities are increasing the number of places available to students studying AI.

“This is an inevitable trend. We coexist with AI,” said Timmy’s mom, Yang Shu. “Children should know that as soon as possible. They should not refuse.”

She is eager to have her son learn both chess and strategy board games. The robot did both and convinced them that the $800 price tag was a good investment. The creator has already planned to add a language tutoring program.

Perhaps this was what the Chinese Communist Party wanted when it declared in 2017 that AI would become the “major driver” of the country’s progress. President Xi Jinping is now making a big bet on that as the slowdown in China’s economy is tackling tariff hits from its biggest trading partner, the US.

Beijing plans to invest 10TN Chinese Yuan (1.4tn; £1tn) over the next 15 years as it competes with Washington to gain a sophisticated technology advantage. AI funding was further boosted by the ongoing government annual political rally. This comes just after the 60 billion yuan investment fund created in January, days after the US tightened its advanced chip export restrictions and placed more Chinese companies on the trade blacklist.

However, Deepseek shows that Chinese companies can overcome these barriers. And that’s what surprised Silicon Valley and industry experts. They didn’t expect China to catch up anytime soon.

This is the reaction Tommy Tang has become accustomed to him after marketing his company’s chessplay robots for six months at various competitions.

Timmy’s machines come from the same company Senserobot, which offers a wide range of capabilities. China’s state media has welcomed the advanced version that defeated Chess Grandmasters in the game in 2022.

“My parents ask about the price, then they ask where I came from. They expect me to come from the US or Europe. They seem surprised I am from China.” “When I say I am from China, there is always a second of silence.”

His company sells over 100,000 robots and is currently signing a deal with Costco, a leading US supermarket chain.

One of the secrets of the success of Chinese engineering is its youth. In 2020, over 3.5 million students graduated with degrees in science, technology, engineering and mathematics, known as STEM.

It’s more than any other country in the world – and Beijing is keen to take advantage of it. “Building education, science and talent strength is a common responsibility,” XI told party leader last week.

Since China opened its economy to the world in the late 1970s, it has “got through a process of accumulating talent and technology,” says Abbott Lyu, a Shanghai-based company that manufactures AI Toys. “In this age of AI, there are a lot of engineers. They’re hardworking.”

Behind him, dinosaurs made of bricks of various colors come to life. It is controlled through a code assembled into a smartphone by a 7-year-old child.

The company is developing toys to help three young children learn codes. All brick packages come with a code booklet. Children can learn how to choose what they want to build and do it. The cheapest toys sell for around $40.

“Other countries have AI education robots too, but China is getting better when it comes to competitiveness and smart hardware,” Lyu argues.

Deepseek’s success transformed CEO Liang Wenfeng into a national hero, “worthing 10 billion yuan for advertising in the AI ​​industry (China)” he added.

“It informed the public that AI is not just a concept, it can actually change people’s lives. It has influenced public curiosity.”

Six home-based AI companies, including Deepseek, are known on the internet as six small dragons of China.

Some of them were at the latest AI fair in Shanghai, where the biggest Chinese companies in the business showed off their advances, from search and rescue robots to dog-like robots wandering the halls among visitors.

In one lively exhibition hall, two teams of humanoid robots fought it in a soccer game, finished in red and blue jerseys. The machine fell when it collided. One of them was left the stretcher field by a human handler who wanted to continue his joke.

Deepseek has made it difficult to overlook the atmosphere of excitement among developers. “Deepseek means the world knows we’re here,” said Yu Jingji, a 26-year-old engineer.

However, as the world learns about the possibilities of China’s AI, there are also concerns about the Chinese government allowing the Chinese government to learn about its users.

AI is data-hungry – the more you get, the smarter it becomes, with over 400 million mobile phone users in the US, Beijing has a real advantage.

Experts in the West, its allies, and many of these countries believe that data collected by Chinese apps such as Deepseek, Rednote and Tiktok can be accessed by the Chinese Communist Party. Some people point to the national intelligence law as evidence.

However, Chinese companies, including Bytedance, which owns Tiktok, say the law allows private companies and personal data to be protected. Still, suspicions that US user data about Tiktok could fall into the hands of the Chinese government have fueled Washington’s decision to ban the highly popular apps.

The same fear that privacy concerns meet national security challenges is struggling with Deepseek. South Korea has banned new Deepseek downloads, while Taiwan and Australia have banned apps from government-issued devices.

Chinese companies are aware of these sensitivity, and Mr. Tan quickly told the BBC that “privacy was a red line” for his company. Beijing also recognizes that this will be a challenge for bidding to become a global leader in AI.

“The rapid rise in Deepseek has sparked a hostile response from parts of the West,” the state-run Beijing commentary added, “The development environment for China’s AI models remains very uncertain.”

However, Chinese AI companies are not thwarted. Rather, they believe that Threfty Innovation will gain an undeniable advantage to them. This is because Deepseek’s claim that it could rival ChatGpt for just a small portion of the costs that shocked the AI ​​industry.

So the engineering challenge is how to make less and more. “This was impossible for us to do,” Tan said. His company discovered that the robot arms used to move chess pieces are very expensive to produce and promote the price to around $40,000.

So they tried to use AI to do engineering work and enhance the manufacturing process. Tan claims he cut the cost to $1,000.

“It’s an innovation,” he says. “Artificial engineering is now integrated into the manufacturing process.”

This could be of great significance as China applies AI on a vast scale. State media already shows factories filled with humanoid robots. In January, the government said it would promote the development of humanoid robots powered by AI to care for a rapidly aging population.

XI has repeatedly declared “technical independence” as an important goal. That means China wants to create its own advanced chips, making up for US export restrictions that could hinder the plan.

The Chinese leader knows he has been in a long race. Beijing Daily recently warned that the Deepshek moment wasn’t the time for “AI victory” as China was still in “catch-up mode.”

President XI has invested heavily in artificial intelligence, robots and advanced technology in preparation for the marathon that China hopes to win in the end.