Shenzhen, China, has announced two new investment funds totaling 7 billion yuan (around US$1 billion) to support startups in robotics and smart devices.

The funds include a 5 billion yuan (US$694 million) fund and a 2 billion yuan (US$278 million) fund, aimed at promoting innovation in the technology sector.

The announcement was made during the Global AI Terminal Expo 2025, a three-day event focused on advancements in AI hardware.

This highlights Shenzhen’s growing role in AI and robotics innovation.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s evolving AI investment strategy: from catching up to leading the pack

Shenzhen’s new 7 billion yuan ($1 billion) AI hardware funds represent the latest chapter in China’s dramatic AI investment transformation that began years ago.

In 2017, Chinese AI startups captured 48% of global AI funding (up from just 10% in 2016), surpassing the US for the first time 1.

This funding surge is part of a deliberate national strategy, with China aiming to develop a domestic AI industry worth $150 billion by 2030 2.

Shenzhen’s latest initiatives set ambitious targets: increasing the market value of its AI terminal industry to 1 trillion yuan ($137 billion) by 2026 and fostering at least 10 leading AI businesses 3.

The focus on hardware-centric AI development, showcased by companies like UBTech and EngineAI at the expo, leverages China’s manufacturing strengths while building advanced AI capabilities.

This represents a strategic evolution from China’s initial AI investments, which often focused on catching up with Western innovations, to now pioneering new applications in areas like robotics and smart devices.

2️⃣ The Shenzhen model: a distinct innovation ecosystem driving rapid AI hardware development

Shenzhen’s approach to innovation differs fundamentally from Silicon Valley’s, operating more like a “farmer’s market of entrepreneurs” focused on collaboration and rapid experimentation rather than strict IP protection 4.

This collaborative ecosystem has transformed Shenzhen from a manufacturing center into an innovation hub where local engineers continuously adapt and improve products for specific markets 4.

The city’s rapid prototyping capabilities have proven particularly valuable for AI hardware development, allowing companies to quickly iterate on physical products integrated with AI capabilities.

This explains why Shenzhen has become home to innovative companies like RayNeo, which now holds 50% of China’s AR eyewear market, and EngineAI, whose humanoid robot achieved the world’s first front flip 3.

The establishment of the Shenzhen AI Glasses Industry Alliance further demonstrates how the ecosystem coordinates efforts around emerging technologies, bringing together manufacturers, component suppliers, and software developers.

3️⃣ Education and talent development: the foundation of China’s AI ambitions

Behind China’s hardware innovation is a massive push to develop AI talent through educational initiatives, with plans to launch 400 new degree programs in AI and robotics 2.

The “Double First-Class Project” has allocated $6 billion to improve 42 universities and 95 disciplines, with a significant focus on AI education 2.

Despite these investments, China currently has only 5% of global AI talent, highlighting both a challenge and opportunity as the country works to close this gap 2.

Beijing’s universities like Tsinghua and Peking University have become central to this effort, functioning as AI research hubs and talent incubators that feed into companies exhibiting at events like the Global AI Terminal Expo 2.

The emphasis on talent development reflects recognition that hardware innovation requires both manufacturing expertise and advanced AI capabilities—a combination Shenzhen is uniquely positioned to deliver with its manufacturing heritage and growing research capabilities.

……