China’s AI Ambitions: Epoch-Making or Overhyped?

Xi Jinping likens AI to the Industrial Revolution, but China’s tech race faces bottlenecks and excess. The Chinese leader called AI an 'epoch-making technological transformation,' yet his government warns against reckless deployment as the nation grapples with idle data centers and U.S. export restrictions.

Xi Jinping said:

"AI is an epoch-making technological transformation."

The 15th Five-Year Plan (2026–2030) positions AI as a 'new productive force' alongside quantum computing and biotechnology. However, Xi cautioned provincial governments: "We must not blindly or recklessly rush in all at once."

DeepSeek’s large language model (LLM) challenges this top-down approach by requiring ~11 times less compute than leading models from OpenAI and Meta.

Yet China’s AI surge faces tangible constraints: excess compute capacity in idle data centers has prompted a national plan to sell surplus infrastructure, while U.S. export restrictions limit access to leading-edge accelerators—though H200 export bans have been partially relaxed.