Forged in a knife fight: China’s brutal domestic AI competition

China’s plan to become a world leader in AI by 2030 is a fixture of practically every Congressional briefing and expert commentary on Beijing’s AI ambitions. The plan’s logic — introduced in 2017 — was simple and alarming: Beijing would direct capital, mobilize its firms, recruit talent, and execute with the strategic patience of a state-led innovation ecosystem. Nearly a decade later, that frame has only hardened. Beijing’s recently issued 15th Five-Year Plan directs Party organs to take “extraordinary measures” to strengthen technological self-reliance and launch a new “AI+” initiative to integrate AI across the nation’s strategic sectors. Beijing has the legal architecture to compel its firms to do its bidding, so Washington has largely concluded that Beijing’s AI sprint reflects deliberate industrial policy, and built America’s response around that assumption.

That conclusion, however, mistakes the frame for the picture. China’s AI rise is being driven as much by market forces as by state direction.

The more you look inside China’s AI ecosystem, the more it looks like the most brutal AI capitalist knife fight across the world. The domestic competition among firms is so fierce that Chinese commentators have a word for it: involution, or neijuan.

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