Introduction

China’s artificial intelligence (AI) commercialization has achieved significant breakthroughs. As of March this year, the daily token usage surpassed 140 trillion, a growth of over 40% compared to the end of last year. AI development is empowering various industries, driving rapid growth in related fields. In the first quarter, the value added of large-scale digital product manufacturing increased by 11.2% year-on-year, with significant growth in sectors directly related to AI, such as electronic materials and integrated circuits, which saw increases of 32.5% and 49.4%, respectively.

Experts indicate that AI is accelerating its deep penetration into the real economy, bringing major innovative opportunities for high-quality economic development and becoming a key driver for cultivating new productive forces and reshaping competitive advantages.

Formation of a Positive Cycle

Tokens are the smallest basic units of information processed by AI models. Each interaction between users and AI essentially represents an exchange of computing resources and data value, with tokens serving as the settlement unit.

This year, intelligent agents like “Lobster” have significantly increased token consumption. Data shows that at the beginning of 2024, China’s daily token usage was 100 billion, projected to leap to 100 trillion by the end of 2025, and surpassed 140 trillion as of March this year.

“This data fully demonstrates that large models and various AI applications have truly moved out of the laboratory and into enterprise production and public life. Concurrently, the related hardware industry has also experienced rapid growth, indicating that China’s AI development is no longer just a ‘software boom’ but has formed a positive cycle from underlying computing power and hardware infrastructure to upstream application ecosystems,” said Wang Guoqing, Vice Dean of the AI Institute of Sichuan Province and Professor at the University of Electronic Science and Technology.

Not only is this growth happening domestically. In February, data from the world’s largest AI aggregation platform revealed that China’s AI large models surpassed the U.S. for the first time with 41.2 trillion token calls. Notably, the platform’s users are primarily overseas developers, with U.S. users accounting for 47.17%, while Chinese developers only make up 6.01%. This makes the platform’s data a more objective reflection of the global appeal of Chinese large models.

“The ’export of tokens’ essentially transforms China’s electricity into high-value digital services that can be delivered globally. This not only reflects the development of China’s smart industry but also highlights the systemic advantages formed in energy costs, open-source ecosystems, and industrial chain collaboration in Chinese AI,” said Zhu Xufeng, Dean of the School of Public Management at Tsinghua University.

China possesses the world’s most powerful industrial chain and manufacturing capacity, forming a relatively complete AI industrial chain ecosystem from chip manufacturing, smart hardware, and algorithm development to various downstream application scenarios and physical products. The country also has a robust infrastructure, with nationwide high-speed mobile communication (5G), cloud computing platforms, and big data centers providing hardware support for AI training and deployment. As the world’s largest producer and consumer of electricity, China leads in installed capacity for renewable energy sources like wind and solar, boasting the longest ultra-high voltage transmission network, which provides ample and inexpensive electricity for the energy-intensive AI computing industry. Additionally, China has cultivated a large pool of undergraduate and graduate students in mathematics, computer science, and engineering, providing a strong talent reserve for the AI industry.

Strengthening Source Innovation

Driven by algorithm optimization, computing power enhancement, and data accumulation, AI demonstrates strong versatility and penetration. However, experts note that several challenges remain for AI to achieve comprehensive empowerment.

Wang Guoqing analyzed that while current AI models perform excellently in closed test sets, they face significant challenges in the complex and variable “open world” environment regarding robustness, interpretability, and safety. In terms of data, although China has a vast amount of data, high-quality, finely labeled multimodal data remains scarce in vertical fields, directly limiting the development of professional-grade AI. On the computing power front, cloud computing costs remain high, necessitating breakthroughs in low-power, high-efficiency edge computing for practical applications such as robot control and high-security identity authentication.

With support from policies and capital, some enterprises are accelerating their technological layouts in frontier fields to break through computing power bottlenecks. Recently, iFlytek announced a strategic investment in the quantum computing team from Tsinghua University, establishing a joint venture to explore the synergy between AI and quantum technology. The focus will be on algorithm research and technological innovation that integrates AI with quantum computing and precision measurement.

“AI has become a key area of international competition. There is still a half to a full generation gap between China and the U.S. in top model capabilities, primarily due to computing power and data, as the latter has trained earlier and on a larger scale,” said Liu Qingfeng, Chairman of iFlytek. He believes that in the next decade of AI development, both the scientific and industrial sectors must seek new development paths, with quantum computing potentially being one of the answers.

The 14th Five-Year Plan explicitly states the need to implement strategic deployments in AI and quantum technology, placing quantum technology as a new economic growth point for future industries. Liu Qingfeng emphasized the importance of not being limited to existing technological iterations but actively planning the next generation of AI, particularly in disruptive fields like “AI+quantum,” to strengthen source technology innovation and establish a more comprehensive mechanism to encourage original innovation, laying a solid foundation for the next generation of AI development.

A Clearer Blueprint

China possesses several inherent conditions and structural advantages in developing its AI industry and should vigorously promote innovation in AI technology, industry, and market applications to empower various sectors. Zhu Xufeng noted that policies are increasingly proactive, with a clearer blueprint for top-level design. In August 2025, the State Council issued opinions on deeply implementing the “AI+” initiative, emphasizing not only the technology itself but also how AI can empower industrial development. Recently, the Ministry of Industry and Information Technology and eight other departments jointly issued implementation opinions for the “AI+Manufacturing” initiative, proposing that by 2027, China will achieve safe and reliable supply of key core AI technologies, maintaining its leading position in industrial scale and empowerment levels.

Li Lecheng, Secretary of the Party Leadership Group and Minister of the Ministry of Industry and Information Technology, stated that efforts will be made to promote the intelligent upgrade of the entire manufacturing process, deeply embedding AI technology into core production processes, and expanding application scenarios such as intelligent auxiliary design, virtual simulation, and fault warning, revolutionizing innovation paradigms, production methods, and management models. The acceleration of intelligent product iterations, including AI smartphones and computers, as well as the development and application of next-generation intelligent terminals like humanoid robots and brain-computer interfaces, will be promoted, alongside deep integration of large models with intelligent connected vehicles and CNC machine tools.

“The ‘AI+’ initiative can greatly stimulate the innovative vitality of the digital economy and accelerate the development of new productive forces,” Zhu Xufeng remarked. In emerging digital economy sectors, the deep integration of AI with frontier technologies like big data, the Internet of Things, and blockchain is expected to give rise to new business formats. In traditional manufacturing, the introduction of technologies such as intelligent robots and machine vision can automate and intelligently control production processes, enhancing industry flexibility and competitiveness, and pushing manufacturing towards higher-end and intelligent development.

Zhu Xufeng suggested that the government should play a leading role, concentrate advantageous resources, and increase funding for top research teams to establish a solid foundation for AI development. Additionally, market and social capital should be encouraged to actively invest in technology development and industrial innovation, forming a diversified investment landscape in the AI industry. By gathering governmental and business resources, collaborative industrial development can be promoted, enhancing China’s competitiveness in the global AI landscape.

Wang Guoqing believes that more supportive policies for basic research in AI application fields should be introduced, and smoother platforms for the transformation of production, education, and research should be established. Focusing on national major needs and market pain points, collaboration between universities and enterprises should be encouraged to shorten the cycle from core technology breakthroughs to the landing of end products, allowing AI to truly play a greater role in real-world scenarios such as hospitals, factories, and schools.