China's Core Artificial Intelligence Industry to Touch $170B In 2025

China’s core artificial intelligence industry is expected to exceed 1.2 trillion yuan, or about $170 billion, in 2025.

This is according to estimates released by China Academy of Information and Communications Technology (CAICT) under the Ministry of Industry and Information Technology. The forecast was issued at an industry forum in Beijing, where officials said China’s AI development has entered a phase defined by large-scale industrial deployment rather than technical experimentation.

CAICT said AI deployment is increasingly tied to productivity gains across manufacturing, finance, internet services, and other sectors.

According to data cited by China Media Group, China’s core AI industry exceeded 900 billion yuan in 2024, growing 24% year-on-year. CAICT said the figure is expected to surpass 1.2 trillion yuan in 2025, with growth accelerating.

The institute reported sharp capability gains in large AI models in 2024, with language understanding improving by about 30% and multi-modal understanding by roughly 50%, supporting broader commercial rollout.

Since the start of this year, the share of large-language model applications in manufacturing rose to 25.9% from 19.9% last year, semi-official Global Times reported citing the CAICT.

CAICT also highlighted rapid growth in embodied intelligence, which integrates AI with robotics. The segment has attracted more than 40 billion yuan in financing and now includes over 350 companies across the industrial chain.

Consumer-facing AI products are expanding alongside industrial use. CAICT data showed that in the first 10 months of the year, China’s online sales of smart wearable devices, including AI glasses and smartwatches, rose 23.1% year-on-year.

Ma Jihua, a veteran technology industry analyst, stated that Chinese AI is evolving from perception to cognition and from specialized systems to general-purpose applications.

China’s presence in AI intellectual property is also growing. A report released at the 2025 World Internet Conference Wuzhen Summit said China accounts for about 60% of global AI patents.

The domestic chip sector is playing a larger role. Data from TrendForce showed that Chinese-made AI chips exceeded a 50% share in Chinese data centers in the fourth quarter of 2024, increasingly replacing some imported products.

Policy backing remains central. Under the State Council’s “AI Plus” guidelines issued in August, China aims to integrate AI across six key sectors by 2027, with AI expected to play a larger role in public governance and economic development by 2030.

“AI is reshaping every industry, from e-commerce and gaming to communications and manufacturing,” Liu Dingding, a Beijing-based internet analyst, told the Global Times, pointing to rapid expansion into automotive, robotics, and agriculture.

Looking ahead, CAICT linked future AI growth to communications infrastructure, projecting the start of commercial 6G applications around 2030, followed by large-scale deployment by 2035.