Shenzhen launches $1.3B fund for AI development

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China’s Shenzhen has its sights on becoming the country’s leading city for artificial intelligence (AI) adoption with a massive capital injection into the sector.

The city has completed plans to roll out a 10 billion yuan (US$1.39 billion) AI fund designed for the ecosystem’s growth and adoption. The city administrators disclosed the plans in a press conference with key ecosystem players and representatives of government agencies in attendance.

The fund will be used to develop AI applications in the city, focusing on hardware and software components. There are plans to expand the fund to cover robotics and other industrial machine-learning applications in manufacturing and other key sectors.

The funds will also be used to prop up AI firms in the region, with local officials pledging to cover over half of the computing costs for selected enterprises. Authorities say each firm will receive up to 10 million yuan (US$1.3 million) in government support through subsidies.

Besides supporting local AI service providers, the city also looks at full-scale AI integration. A previous document detailed 200 application scenarios with AI, with authorities unveiling an additional 100 state-backed use cases.

Top on the list for Shenzhen are AI-powered applications in healthcare, manufacturing, emergency response, security, and city sanitation.

Shenzhen, a tiny fishing port in Southeast China, now houses over 2,200 AI firms at a blistering digitization pace. The new AI fund is expected to support a thriving ecosystem with activities from AI chip production to large language model (LLM) designs.

While the city leans toward AI for digitization, it has taken the lead with digital yuan adoption among its peers. A report indicated that Shenzhen is exploring central bank digital currencies (CBDCs) for its cross-border application more than the rest of China.

Chinese AI ambitions steamroll ahead

Keen on surging ahead of the West, China has placed a fortune into its AI ambitions, building a research platform and attempting to pursue global uniformity. The commercial rollout of DeepSeek to rival ChatGPT is seen as the strongest statement of intent by the Asian superpower.

Amid an ongoing trade war with the U.S., China is looking inward for its semiconductor needs, building out new fabrication plants in multiple cities.

Asian firms are doubling down on AI via massive investment

The report confirms a surge in AI investment activity by enterprises across Asia, with firms tripling their AI spending over the last year.

The majority of the respondents say most of their AI spending is designated for generative AI to improve internal operations. The segment makes up 42% of average AI spending, with IT and customer service operations leading the charge while cybersecurity and software development are on the rise.

65% of organizations in the Asia Pacific are leaning toward on-premise AI infrastructure over cloud-based systems. Only 19% indicate an affinity for public cloud services but there is a consensus on both sides that a hybrid infrastructure is the best route.

“Hybrid architectures offer the best of both worlds—scalability and control. ASEAN+ is leading with higher adoption rates, reflecting a focus on innovation, security, and compliance,” said Varinderjit Singh, General Manager of Lenovo Malaysia.

AI-powered PCs are increasing market share in the region, with 43% of respondents confirming plans for full enterprise adoption. Countries in the ASEAN+ are demonstrating a keen readiness, with 65% of organizations in the region unveiling AI PC ambitions.

Apart from unveiling AI ambitions, Asian companies are keen on rolling out ethical frameworks for responsible AI usage.

“For 2025, governance, risk, and compliance have jumped 12 spots to become the top priority, reflecting the focus on secure and responsible AI,” Sumir Bhatia, President of Lenovo’s Asia Pacific Infrastructure Solutions Group, said.

The report highlights concerns for firms keen on integrating AI into their internal processes. At the top of the pyramid lies governance and ethical concerns, triggering a push for increased safety guard rails.

Firms are also leaning toward partnerships to ease their entry into AI and address talent shortages and steep costs. Microsoft (NASDAQ: MSFT) has since waded into the region, inking high-level partnerships with the private sector and government for AI and blockchain infrastructure.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

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