China's ambitious goal of becoming the world's artificial intelligence powerhouse by 2030 is gaining momentum, according to the RAND Corporation's newly updated report released on June 27, 2025.
The comprehensive analysis, authored by Kyle Chan, Gregory Smith, Jimmy Goodrich, Gerard DiPippo, and Konstantin F. Pilz, examines how Beijing is deploying industrial policy tools across the full AI technology stack - from semiconductor chips to real-world applications.
Titled 'Full Stack: China's Evolving Industrial Policy for AI,' the report finds that China's AI industrial policy is likely accelerating the country's rapid progress, particularly through strategic support for research, talent development, subsidized computing resources, and practical applications.
At an April 2025 Politburo meeting on AI, Chinese President Xi Jinping emphasized 'self-reliance' and the creation of an 'autonomously controllable' AI hardware and software ecosystem. This aligns with China's January 2025 launch of an $8.2 billion National AI Industry Investment Fund, part of a broader $138 billion National Venture Capital Guidance Fund targeting AI-related fields.
The report highlights that Chinese AI models are closing the performance gap with leading US models. While most growth is driven by private tech firms, state support has enhanced capabilities. By June 2024, China had reached 246 EFLOP/s of total compute capacity, aiming for 300 EFLOP/s by 2025. However, this represents only about 15 percent of total global AI compute, compared to America's 75 percent.
AI adoption in China is growing rapidly across multiple sectors, from electric vehicles and robotics to healthcare and biotechnology. Beijing is particularly focused on promoting data-sharing for robotics through institutions like the Beijing Embodied Artificial Intelligence Robotics Innovation Center. By 2030, China aims for AI to become a $100 billion industry and create more than $1 trillion of additional value in other industries.
While Chinese firms face challenges from US export controls on advanced AI chips, they are pursuing various strategies to overcome these limitations, including developing domestic alternatives like Huawei's Ascend series, stockpiling chips, and building data centers globally. The RAND analysis suggests these efforts, combined with China's industrial policy approach, will continue to narrow the AI capability gap with the United States in the coming years.