China’s Advancements in Smart Computing Enhanced by Rising AI Demand and Technology Restrictions
China experienced significant growth in its smart computing power over the past year, driven by technology trade restrictions and increased investment in the AI sector.
China has rapidly expanded its smart computing capacity over the past year, driven by soaring demand for artificial intelligence (AI) large language models and strategic efforts to strengthen its tech sector amidst trade restrictions imposed by the United States.
According to data released by the National Bureau of Statistics on Monday, smart computing now constitutes 30% of China’s total computing capacity. This marks a significant increase of nearly 5 percentage points since June last year, with projections suggesting it could rise to 35% by 2025, as reported by the China Academy of Information and Communications Technology (CAICT).
Smart computing focuses on handling complex algorithms and large-scale unstructured data using high-performance graphics processing units, enabling faster and more cost-effective training of large models. This capability has become crucial after US restrictions limited China’s access to high-performance chips.
China has consolidated its computing resources to accelerate technological development amidst escalating trade curbs. By the end of May, the country had established over 10 smart computing centers equipped with high-performance clusters.
Beijing aims for technological self-reliance to drive economic growth, with CAICT estimating that every 1% increase in computing power contributes 0.2% to overall economic growth and 0.4% to digital economy growth. Investments in the industry are projected to yield three to four times their initial amount in economic output.
The pursuit of technological parity has intensified following US advancements in large language models like ChatGPT and text-to-video models such as Sora. In response, Chinese local governments have accelerated the construction and deployment of computing clusters to meet growing AI demands.
For instance, Chengdu, home to nearly 900 AI companies valued at 78 billion yuan (US$10.8 billion), launched a new smart computing center on July 2. Officials expect the center to enhance efficiency by up to 80% and reduce costs for research institutes and tech firms.
To enhance connectivity and efficiency across regions, China launched its first computing interconnectivity platform last week. This platform will identify, register, and test computing resources nationwide, providing AI firms with access to computing power from various parts of the country.
On a national scale, China’s “Eastern Data and Western Computing” megaproject aims to establish eight computing hubs and 10 data center clusters, attracting approximately 400 billion yuan in annual investment. This initiative is crucial for overcoming market fragmentation, facilitating data flow, and driving the progress of China’s AI industry while reducing operational costs for tech companies.
