China said it will prevent excess competition in the red-hot artificial intelligence sector, a signal that Beijing wants to avoid wasteful investment even as it seeks to turn the technology into a key pillar of the economy.
The country’s top economic planner said the government will encourage provinces to develop AI in a coordinated and complementary way. The goal is to leverage their distinctive strengths to foster growth without duplicating efforts, according to Zhang Kailin, an official with the National Development and Reform Commission.
“We will resolutely avoid disorderly competition or a ‘follow-the-crowd’ approach,” Zhang told reporters at a briefing Friday. Development should be based on local advantages, resources and industrial foundations, he said.
His remarks echo Chinese President Xi Jinping’s caution against excessive local government investment in AI last month. The comments underscore policymakers’ desire to avoid a repeat of the overcapacity seen in other emerging industries like electric vehicles, which has contributed to deflationary pressures.
Beijing has identified AI as a new growth driver for the world’s second-largest economy and a critical area of competition with the U.S., which has spurred public and private investment.
Earlier this week, the government published an action plan aimed at accelerating AI development, application and governance. The NDRC expanded on the proposal on Thursday, vowing better AI planning at the national level and greater support for private companies to nurture more “dark horses” for innovation, a likely reference to the rapid rise of Chinese startups like DeepSeek.
The company catapulted to global prominence earlier this year with an powerful yet cost-effective AI model and spurred a domestic AI frenzy. A separate Bloomberg News analysis shows Chinese firms are aiming to install more than 115,000 Nvidia Corp. AI chips in data centers across the country’s western deserts.
This story was originally featured on Fortune.com
