Wu Ting: AI City War
Author | Wu Ting
The AI represented by DeepSeek has given China an opportunity to re - evaluate its value and also given domestic cities a chance to reshuffle their positions.
The first - tier pattern of "Beijing, Shanghai, Guangzhou, and Shenzhen" has remained unchanged for 25 years. Next, will there be a dark - horse city in AI that makes a counter - attack?
Today, I'll take you through the development situation of each city one by one.
Let's start with the country's top - level design. As early as 2017, the State Council put forward a "three - step" strategy:
By 2020, AI technology and applications would be on par with the world's advanced level, with the core industry reaching a scale of 150 billion yuan and driving related industries to a scale of 1 trillion yuan;
By 2025, major breakthroughs would be achieved in AI basic theories, the core industry would reach 400 billion yuan, and drive industries to 5 trillion yuan;
By 2030, AI theories, technologies, and applications would lead the world, the core industry would reach 1 trillion yuan, and drive industries to 10 trillion yuan.
Looking back now, we find that this plan was still conservative. Just talking about the actual industrial scale, according to data from the Ministry of Industry and Information Technology, as of September 2024, China's AI core industry scale was already close to 600 billion yuan, achieving 150% of the 2025 target ahead of schedule.
The general direction is correct. Anyway, this plan was a starting point. Next, various ministries and commissions issued a series of ethical norms, guiding opinions, and construction guidelines, and local areas also began to make efforts in the AI industry.
In the field of AI, Beijing, the capital, is undoubtedly the number one in the country, leading by a huge margin.
Let me put it this way. In all the competition aspects you can think of, whether it's talent, patents, enterprises, financing, or the number of large models, Beijing ranks first in the country, and all account for more than 30% of the national total; last year, Beijing's AI core industry scale was 300 billion yuan, accounting for half of the national total; there are more than 2,400 AI enterprises in Beijing, accounting for about 40% of the national total; among the 696 AI industry financings in the country last year, Beijing accounted for 213; among the more than 200 registered large models in the country, Beijing accounted for 123, and just Haidian District accounted for 76.
It fully explains what it means by "Your elder always remains your elder."
Economics tells us that to develop an industry, we need to see if there are sufficient factor endowments, that is, various resources. Beijing's core advantageous resources lie in two aspects:
Firstly, it has the most top - tier universities in China, which is a high - ground for scientific research.
Among the top ten universities in the country, Beijing may only have two; but among the top two universities in the country, Beijing still has two.
For cutting - edge technologies like AI, many times it's "Easy to find a thousand soldiers, hard to find a general." Top - notch scholars are especially important. There is an AI 2000 list, which lists 2,000 top AI scholars globally. 280 of them are from China, and 121 of them are from Beijing, accounting for more than 40%, leading by a huge margin again.
There is also an AI Rankings institution that has counted the global AI achievement publication volume from 2015 - 2025. Comparing countries, the United States ranks first, and China ranks second. But comparing cities, Beijing ranks first; comparing schools, Peking University ranks first, and Tsinghua University ranks third.
These talents and achievements don't just stay in the laboratory. With a wave of their hands, companies are established in minutes, and capital rushes in. For example, Zhipu AI is from Tsinghua University; Yuezhianmian is from Tsinghua University; Baichuan Intelligence is also from Tsinghua University. Of course, there are also many from Peking University and other universities.
Secondly, Beijing has Zhongguancun, which was accumulated during the Internet era. This is an industrial high - ground.
There are 49,000 AI scholars in China, and 15,000 of them are in Beijing, among which just Haidian District accounts for 12,300.
Besides Baidu and ByteDance, four of the "six little tigers" of large models are in Zhongguancun. There are also Cambricon and Moore Threads, which make AI chips; Horizon Robotics, which focuses on intelligent driving; Fourth Paradigm, which deals with data decision - making; Megvii Technology, which focuses on computer vision, etc. I have led in - depth study visits to more than half of these companies, and some of them are the enterprises of our guest alumni.
Shanghai is also one of the earliest cities to layout AI. Zhangjiang in Shanghai has developed into the most concentrated and complete integrated circuit industrial cluster on the Chinese mainland.
Since 2018, Shanghai has been hosting the "World Artificial Intelligence Conference". It is not only a window for international exchanges but also the preferred location for the Chinese headquarters or R & D centers of many multinational technology companies, such as NVIDIA and Tesla.
International enterprises are one of Shanghai's advantages in developing AI, but Shanghai's more core industrial advantage lies in chip enterprises and computing power. If Beijing focuses on the "brain" of China's AI, then Shanghai focuses on the "core" of China's AI.
With the booming of the industry, more and more AI chip enterprises in Shanghai are emerging, such as Enflame Technology, Biren Technology, Days Intelligence, and Muxi. When the supply of NVIDIA chips is restricted, they have all explored chip solutions suitable for domestic large models.
Moreover, Shanghai is actively deploying high - performance computing power infrastructure, and its comprehensive computing power index and computing power scale rank first in the country.
Why isn't Beijing first? Because computing power consumes a lot of energy, and the computing power clusters of many Beijing enterprises are deployed in Langfang and Zhangjiakou in Hebei... They have literally made Hebei the province with the first - ranked comprehensive computing power index in the country.
Let's get back to Shanghai. Based on chips and computing power infrastructure, Shanghai has the strength to compete in all directions of the AI industry.
But Shanghai may not be able to hold on to the second - place position because Shenzhen is eyeing it covetously.
At the end of 2023, the number of AI - related enterprises in Shenzhen ranked third in the country, only after Beijing and Shanghai. But this ranking is likely to change. Last year, there were 120 financings in Shenzhen's AI industry, surpassing Shanghai.
Shenzhen's core advantages lie in two aspects:
Firstly, Shenzhen is the capital of manufacturing.
If Beijing is the "brain" and Shanghai is the "core", then Shenzhen is the "hand".
There are countless industrial manufacturing scenarios here where AI can be applied. After all, mechanical hands also need intelligence, and embodied intelligence is also intelligence. For example, the enterprise of a guest business school alumnus, Ubtech, is in Shenzhen, and their Walker S1 has become the industrial - version humanoid robot employed in the most factories globally.
Secondly, Shenzhen has giants.
DJI focuses on computer vision, BYD focuses on intelligent driving, Mindray Medical deploys medical large models, ZTE Corporation layouts computing power, Huawei has the Pangu large model and Ascend AI chips, and Tencent has the Hunyuan large model and many C - end applications... There are a group of high - starting players in Shenzhen's AI. In this regard, both Beijing and Shanghai are envious.
The giants not only develop themselves but also drive the development of a group of ecological enterprises.
At the end of last year, Huawei cooperated with Shenzhen Qianhai to establish the Global Embodied Intelligence Industry Innovation Center and signed cooperation agreements with 16 enterprises at once, including a group of Shenzhen enterprises such as Leju Robot, Han's Robot, and ZhaoWei Machinery. Huawei is very good at one thing, which is to improve the localization rate with partners and get rid of the dependence on imported components. There's no way, it has been hurt by the blockade.
Tencent has super application scenarios and traffic like WeChat, WeCom, Tencent Meeting, and Tencent Docs. It can empower whoever it wants. After Tencent Yuanbao connected to DeepSeek and had a wave of advertising, its monthly active users increased by 265% in February and 196% in March. It has become the sixth - ranked AI application in terms of monthly active users globally. Isn't it amazing?
In order to develop AI, the Shenzhen government is also very generous with money. It issues "training power vouchers", "corpus vouchers", and "model vouchers" every year. Enterprises can get million - level government subsidies for renting computing power to train models, purchasing or opening up corpora, and completing the registration of large models. In order to not just be in the "top three", Shenzhen has really spared no expense.
Now let's talk about Hangzhou. In 2025, it is obviously a disruptor.
Looking back at the end of 2024, Hangzhou didn't have much say in the field of AI. If Beijing stands alone in the first tier, Shanghai and Shenzhen are in the second tier, then Hangzhou can only barely be on the edge of the second tier, or even fall into the third tier.
Until January 2025, DeepSeek - R1 emerged out of nowhere. With about one - tenth of the training cost, it achieved performance comparable to the world's top large models, and it was also open - source. It was a scientific and technological achievement of national - fortune level. It not only single - handedly wiped out 600 billion US dollars of NVIDIA's market value but also pushed Hangzhou and even China to the forefront of the AI era.
Immediately afterwards, the robots of Unitree Robotics became popular. Wang Xingxing, the 90 - post founder, attended the symposium for private enterprises, which caused a lot of discussion. People suddenly found that Unitree's quadruped robots cost only one - fifth of the international similar products and have occupied 60% of the global market share, and the company has been profitable for five consecutive years since 2020.
The six little dragons represented by DeepSeek and Unitree have made Hangzhou the hottest AI industrial city this spring.
Zhejiang University has also become popular. In terms of the AI achievement publication volume in the past decade, Zhejiang University is only after Tsinghua University and Peking University; in terms of entrepreneurship by Zhejiang University alumni, three of the six little dragons graduated from Zhejiang University.
There is also Alibaba here. Alibaba Cloud is the first - ranked cloud - computing company in China and the third - ranked globally. Its Quark and Tongyi Qianwen large models are all top - notch AI applications.
In terms of industrial ecology, Hangzhou is a city of private enterprises. There are Geely, Leapmotor, Hikvision, Dahua... They are the foundation of Hangzhou.
In terms of policy support, as netizens put it: Hangzhou's long - term favorable business environment has nurtured 60,000 "koi fish", which have hatched the six little dragons; while many other cities only want six dragons in total. So, do you think Hangzhou is strong?
While the four major AI hubs of Beijing, Shanghai, Shenzhen, and Hangzhou are having a fierce confrontation, cities like Guangzhou, Suzhou, Hefei, and Xi'an are also looking for differentiated breakthroughs based on their own endowments.
Some scholars have long pointed out a profound saying: The biggest secret of China's economic miracle is local competition.
So in this "AI city war", there are no real losers. Each city is looking for its own path, and ultimately jointly promoting the development of the AI industry. If there is really a national fortune, it comes from this.
Reference materials:
[1] New Generation Artificial Intelligence Development Plan. State Council. 2017
[2] In 2024, the financing in the artificial intelligence industry exceeded 100 billion yuan, and half of the AI companies received investment within three years of establishment. IT Juzi. 2025
[3] Global AI Ten - Year Trend: China Ranks Second Globally, Beijing Leads the City List, and Peking University Tops the List for Three Consecutive Years. Tongzhi Tianxia. 2025
[4] Competitive Analysis of the AI Application Market in the First Quarter of 2025. QuestMobile. 2025
[5] Behind the Rise of Shanghai's AI Power: How to Take It to the Next Level with a Comprehensive Layout of the Innovation Ecosystem. The Paper. 2025
[6] It's Them Who Created the "Hangzhou Phenomenon". Caijing. 2025