Alibaba and DeepSeek’s home province launches AI spending spree to become innovation hub

The provincial government of Zhejiang, home to Alibaba Group Holding and DeepSeek, has released a comprehensive policy package to accelerate artificial intelligence (AI) research, industrial growth and talent acquisition, in an effort to turn the region into a “global AI innovation development highland”.

Under the plan, major companies in the AI supply chain – including those responsible for large language models, cloud computing and semiconductors – are expected to generate combined operating revenues of more than 1 trillion yuan (US$138.6 billion) by 2027, according to the policy, which was drafted in April and published on the provincial government’s website last week.

That would be nearly double the current production value of China’s AI industry, which last year saw total output worth 570 billion yuan, according to official data.

The strategy combines fiscal support, talent incentives and other measures designed to foster growth and respond to Beijing’s call for technological self-reliance that has urged local governments, computing centres and companies to purchase or adopt home-made software and hardware.

Financial support includes attracting more than 10 billion yuan in venture capital to invest in AI – especially in early-stage, long-term research in hard tech – subsidising start-ups that invest more than 3 per cent of their operating revenue in research and development, and providing up to 30 million yuan for projects focused on foundational AI models and vertical applications.

The programme also offers consumers a 15 per cent discount – up to 2,000 yuan per order – when buying intelligent devices such as household robots and smart glasses.

South China Morning Post