The Rise of Generative AI in China: Insights from 2025
When DeepSeek stepped onto the global stage in January 2025, it quickly became a noteworthy player in a burgeoning field. However, it didn’t appear overnight; it was part of a vast landscape of generative AI tools that have emerged in China since 2023. The Chinese government’s commitment to regulating these technologies has resulted in a public archive, showcasing each new creation in the form of an algorithm registry.
Regulatory Framework for AI Development
The Cyberspace Administration of China (CAC) requires developers to register AI tools that could influence public opinion or mobilization. This involves demonstrating compliance with a detailed set of guidelines addressing 31 categories of risk, including discrimination and mental health impacts. Developers file their submissions with local CAC offices, which then relay the applications to the central authority for approval. This regulatory approach is markedly different from the EU’s comprehensive AI Act, which seeks to address the entire landscape of AI concurrently. Matt Sheehan, a research scholar at the Carnegie Endowment for International Peace, notes that China’s strategy is more iterative, focusing on specific algorithms as they arise. In the absence of a similar framework in the U.S., China’s approach inadvertently creates a detailed map of its AI ecosystem, making it the most comprehensive record globally.
As of April 2025, the CAC’s database features an extensive array of registered tools, ranging from homestay management AIs to innovations assisting medical professionals. For example, a young AI called DeepSeek is listed among these entries, revealing the breadth of capabilities emerging from China’s tech sector.
China’s generative AI registrations predominantly cluster around its major metropolitan areas—Beijing, Shenzhen, Shanghai, and Hangzhou. Each city possesses unique characteristics driving innovation: Beijing’s academic prowess and governmental backing, Shenzhen’s engineering talent, Shanghai’s commercial acumen, and Hangzhou’s e-commerce influence through platforms like Alibaba. However, innovation extends well beyond coastal cities; cities like Chongqing and Hefei are positioning themselves as key nodes in AI production and application.
Interestingly, state-linked entities comprise 22% of the registry, indicating how deeply intertwined the government and big tech are in developing AI applications. In contrast, foreign firms represent just 0.5% of the total listings, highlighting a predominantly domestic landscape. Notable collaborations, such as PetroChina teaming up with Huawei, illustrate how state-owned enterprises are investing in AI to improve efficiency in their sectors.
Competitive Landscape and Startups
More than half of the algorithm registry entries represent cross-sector technologies, which feature foundational AI models and various multimedia tools. This competition is starkly different from the U.S. market, where giants like OpenAI and Google DeepMind dominate. In China, emerging startups, often referred to as “AI tigers,” contribute to a rich tapestry of innovation. Companies like Moonshot and Minimax, backed by major players like Alibaba and Tencent, are striving to create comprehensive AI solutions.
Among the innovative startups, Squirrel AI stands out in the educational sector, with significant adaptations following China’s ban on for-profit tutoring. By pivoting to a licensing model, Squirrel AI has expanded its reach and currently engages over a million students across its network. Meanwhile, AI Kanshe is revolutionizing traditional Chinese medicine by utilizing machine vision for diagnostics. This startup emphasizes the potential for AI integration into historical practices, aiming to enhance healthcare delivery.
Another interesting newcomer is Zhongtan Puhui Cloud Technology, which tackles carbon accounting through AI tools. Founded by a former Wall Street quant trader, this company enhances efficiency in carbon footprint analysis, appealing to a range of clients from large enterprises to smaller exporters.
As we move deeper into 2025, it’s clear that China is not only fostering a vibrant generative AI ecosystem but is also witnessing a competitive landscape primed for both collaboration and rivalry. The blend of regulatory oversight and entrepreneurial spirit continues to pave the way for groundbreaking developments, making China a key player in the global AI arena.