Go, Shanghai! City's rapid progress in AI development gets top-level endorsement

President Xi Jinping went to the coalface of China's ambitions to lead development of artificial intelligence with a visit this week to a Shanghai site that is nurturing new applications for the technology. He praised what he saw.

His tour of the city, including the Shanghai Foundation Model Innovation Center, which aims to be the world's biggest incubator of artificial intelligence advancement and already has a roster of more than 100 startups involved in projects ranging from humanoid robots to breakthrough AI models.

Xi engaged with young innovators working at the venue, observing their efforts in robotic technology and even trying on AI-powered smart glasses in a themed store there. More importantly, as reported by Xinhua news agency, he urged Shanghai to take a leading role in both the development and governance of artificial intelligence.

"AI technology is evolving rapidly and entering a phase of explosive growth," Xi stated, emphasizing the nascent yet pivotal nature of the industry and its connection to the younger generation. He affirmed China's strong commitment to AI development, highlighting recent top-level policies unveiled to promote the industry, Xinhua reported.

The visit generated a burst of enthusiasm at the Xuhui District center, encouraging innovators in their pioneering work developing everything from robots for factory and home use to AI technology already impacting the lives of millions of users.

However, these startups face competition from established international players such as Tesla, Google, and OpenAI, the developer of ChatGPT – creating both pressure and opportunities, particularly amid the complexities of current Sino-US trade tensions.

Startups show innovation

Peng Zhihui, co-founder and chief technology officer of AgiBot, showcased the company's humanoid robots, including the recently unveiled Lingxi X2. This general-purpose robot, launched in March, demonstrated improved motion control and intelligence by riding a bicycle.

"Humanoid robots are the most promising physical form leading to generalized artificial intelligence in the future and have become a hotspot for international competition," said Peng, a former Huawei Technologies employee and prominent online figure.

AgiBot forecasts substantial revenue growth in 2025 from production of thousands of humanoid robots this year, following the milestone of its 1,000th robot rolling off the production line in January. The sector's potential is further underscored by technology giant Tencent's raising its stake in Agibot to 2.7 percent from 2.06 percent in April.

Leveraging Shanghai's abundant data resources, Kupas, a company founded in 2024, has focused on building a high-quality corpus database to better serve the AI industry, particularly smaller companies and innovative entrepreneurs.

Corpus, meaning "body" or collection of data in AI industry, is crucial for enhancing AI model training, which is vital for applications across various specialized fields, including physics and medicine.

Another startup within the center, Shanghai Quality Intelligence Co, is concentrating on developing self-reliant AI infrastructure products and solutions – a strategic focus given the current US sanctions. Zhu Xin, the company's chief executive, said the mission is to provide "high-quality AI for critical sectors."

A booming AI incubator

Prior to President Xi's visit, Shanghai had already outlined ambitious plans to parlay the center into world prominence, underscoring the city's determination to become a global leader in AI innovation and application.

The incubation center has expanded in size almost sixfold since its inception in 2023. Many of the companies operating there, such as Kupas, were founded in the last one to two years, highlighting the rapid growth of the ecosystem.

According to Yu Linwei, vice mayor of Xuhui District, the expanded incubator encompasses a comprehensive, vibrant ecosystem of online community involvement, policy support and fundraising channels.

The district hosts over 255 AI companies, including notable players like MiniMax and StepFun, as well as more than 100 investment institutions and 10 "unicorn" companies, or startup private firms valued at over US$1 billion. The center benefits from city-level subsidies exceeding 130 million yuan (US$18.1 million) and offers open-source "test corpus" capacity exceeding 180 terabytes.

Collaborative effort is part of the center's ethos, with participants like Quality Intelligence partnering with Kupas and Midu on text corpus, models, systems and application development.

AI: a Pioneering Industry in Shanghai

Artificial intelligence sits alongside biomedicine and integrated circuits as primary pillars of Shanghai's "pioneer industries." In the first quarter revenue, from the city's AI industry grew by over 13 percent, outpacing the 5.1 percent growth in municipal gross domestic product.

Shanghai officials have said the city aims to create a world-class AI industry ecosystem by 2025, with the industry's scale surpassing 450 billion yuan in 2024.

Major tech companies like Baidu, Huawei, SenseTime and Tencent have established regional headquarters or functional centers in Shanghai, contributing to a highly coordinated AI industry chain.

The Shanghai Data Exchange facilitates data sharing, while SenseTime's AI Data Center, the largest of its kind in Asia, provides substantial computing power for training advanced AI models.

Beyond incubating innovation, China's push into AI is highlighted by events such as the ongoing Auto Shanghai 2025 show, which is showcasing advancements in autonomous driving, electric car-battery technology and the development of a comprehensive smart-driving industry chain, as well as humanoid robots like AgiBot as "guides" in booths.

"A truly intelligent car deeply integrates generative AI into both the smart driving system and the cockpit," said Wang Xiaogang, chairman of SenseAuto, a subsidiary of SenseTime.