South China Morning Post - China's AI capital spending 2025
Summary
A Bank of America report forecasts China's AI capital expenditure to grow 48% in 2025, with total spending between US$84-98 billion. Government and major tech companies are driving substantial investments in AI technology.
Review
The source highlights China's aggressive AI investment strategy, reflecting the nation's commitment to becoming a global leader in artificial intelligence technology. The projection of up to US$98 billion in capital expenditure for 2025 represents a significant 48% year-on-year growth, with government investment expected to contribute around US$56 billion and major internet firms adding another US$24 billion.
The report's context is particularly noteworthy in light of the US-China technological rivalry, with the spending surge catalyzed by the success of DeepSeek, a Hangzhou-based startup that gained international attention by developing advanced open-source AI models at a fraction of traditional development costs. This has prompted major Chinese tech companies like Alibaba and Tencent to accelerate their AI investment strategies, signaling a potentially transformative period in China's AI ecosystem and global technological competition.
Key Points
- China plans to invest up to US$98 billion in AI capital expenditure in 2025
- Government expected to contribute around US$56 billion to AI investments
- DeepSeek's successful AI models have inspired increased tech industry investment
- Represents a 48% growth in AI capital spending from the previous year