China launches US$8.2 billion AI fund amid escalating US tech sanctions

China has unveiled a new AI investment fund with an initial capital of 60 billion yuan (US$8.2 billion), signaling its intent to bolster AI development despite intensifying US trade restrictions.

The announcement comes days after the United States tightened export controls on advanced semiconductors and expanded its trade blacklist targeting Chinese tech companies, according to the South China Morning Post.

The National AI Industry Investment Fund, registered in Shanghai last Friday, is a joint venture between state-backed Guozhi Investment and the China Integrated Circuit Industry Investment Fund (CICF) Phase III. According to business registry Qcc.com, the fund will focus on equity investments and asset management, though further details remain undisclosed.

This initiative highlights Beijing’s eagerness in advancing its AI capabilities, which it has identified as a national priority amid escalating tensions with Washington. China’s AI market is projected to reach 5.6 trillion yuan (US$767 billion) by 2030, bolstered by favorable policies and government support.

The fund’s launch coincides with a new wave of US sanctions aimed at curbing China’s tech ambitions. Last week, the US Department of Commerce added over two dozen Chinese entities to its Entity List, effectively barring them from accessing US technology without special licenses. Among those listed are Beijing-based AI start-up Zhipu AI and chip designer Sophgo, both accused of ties to China’s military. Zhipu AI has denied the allegations, calling the sanctions baseless, while Sophgo has refuted claims of wrongdoing.

Adding to the pressure, the US unveiled sweeping restrictions on AI chip exports, capping access for most countries and entirely blocking shipments to China, Russia, Iran, and North Korea. Nvidia, a leader in AI chips, criticized the measures as overreaching and warned they could stifle access to widely available consumer technology.

The CICF’s third phase, launched in May 2023, represents China’s largest chip-focused investment fund. It is backed by major state entities, including the Ministry of Finance and China Development Bank Capital, reinforcing China’s ambition to achieve technological self-reliance amid an increasingly fraught tech rivalry with the US.

Share this Post:

Accessibility Toolbar