The coder ‘village' at the heart of China's AI frenzy
It looked like Silicon Valley, but it was Liangzhu, a quiet suburb of the southern Chinese city of Hangzhou, which is a hot spot for entrepreneurs and tech talent lured by low rents and proximity to tech companies like Alibaba and DeepSeek.
'People come here to explore their own possibilities,' said Felix Tao, 36, a former Facebook and Alibaba employee who hosted the event.
Virtually all of those possibilities involve artificial intelligence. As China faces off with the United States over tech primacy, Hangzhou has become the center of China's AI frenzy.
A decade ago, the provincial and local governments started offering subsidies and tax breaks to new companies in Hangzhou, a policy that has helped incubate hundreds of startups. On weekends, people fly in from Beijing, Shanghai and Shenzhen to hire programmers.
Lately, many of them have ended up in Tao's backyard. He helped found an AI research lab at Alibaba before leaving to start his own company, Mindverse, in 2022. Now Tao's home is a hub for coders who have settled in Liangzhu, many in their 20s and 30s. They call themselves 'villagers,' writing code in coffee shops during the day and gaming together at night, hoping to harness AI to create their own companies.
Hangzhou has already birthed tech powerhouses, not only Alibaba and DeepSeek but also NetEase and Hikvision.
In January, DeepSeek shook the tech world when it released an AI system that it said it had made for a small fraction of the cost that Silicon Valley companies had spent on their own. Since then, systems made by DeepSeek and Alibaba have ranked among the top-performing open source AI models in the world, meaning they are available for anyone to build on. Graduates from Hangzhou's Zhejiang University, where DeepSeek's founder studied, have become sought-after employees at Chinese tech companies.
Chinese media closely followed the poaching of a core member of DeepSeek's team by the electronics company Xiaomi. In Liangzhu, many engineers said they were killing time until they could create their own startups, waiting out noncompete agreements they had signed at bigger companies like ByteDance.
DeepSeek is one of six AI and robotics startups from the city that Chinese media calls the 'six tigers of Hangzhou.'
Last year, one of the six, Game Science, released China's first big-budget video game to become a global hit, Black Myth: Wukong. Another firm, Unitree, grabbed public attention in January when its robots danced onstage during the Chinese state broadcaster's televised annual spring gala.
This spring, Mingming Zhu, the founder of Rokid, a Hangzhou startup that makes AI-enabled eyeglasses, invited the six founders to his home for dinner.
It was the first time they had all met in person, Zhu said. Like him, most of the six had studied at Zhejiang University or worked at Alibaba.
'When we started, we were small fish,' Zhu said. 'But even then, the government helped out.' He said government officials had helped him connect with Rokid's earliest investors, including Jack Ma, the founder of Alibaba.
But some said the government support for Hangzhou's tech scene had scared off some investors. Several company founders, who asked not to be named so they could discuss sensitive topics, said it was difficult for them to attract funds from foreign venture capital firms, frustrating their ambitions to grow outside China.
The nightmare situation, they said, would be to end up like ByteDance, the Chinese parent of TikTok, whose executives have been questioned before Congress about the company's ties to the Chinese government.
Founders described choosing between two paths for their companies' growth: Take government funding and tailor their product to the Chinese market, or raise enough money on their own to set up offices in a country like Singapore to pitch foreign investors. For most, the first was the only feasible option.
Another uncertainty is access to the advanced computer chips that power artificial intelligence systems. Washington has spent years trying to prevent Chinese companies from buying these chips, and Chinese companies like Huawei and Semiconductor Manufacturing International Corp. are racing to produce their own.
So far, the Chinese-made chips work well enough to help companies like ByteDance provide some of their AI services in China. Many Chinese companies have created stockpiles of Nvidia chips despite Washington's controls. But it is not clear how long that supply will last, or how quickly China's chipmakers can catch up to their American counterparts.
A seemingly inescapable concept in Hangzhou is 'agentic AI,' the idea that an artificial intelligence system could be directed to act on its own.
Qian Roy, another Hangzhou entrepreneur, has developed an AI-enabled digital companion for young people that responds to their moods based on information from the Myers-Briggs personality test, which is popular among young people in China. His team programmed his app, All Time, using publicly available AI systems, including those made by DeepSeek, Alibaba and Anthropic, an American startup.
Mindverse, the company cofounded by Tao, who hosted the backyard event, is working on a product that would use AI to help people manage their lives. It can send supportive daily emails to colleagues, for example, or regular text messages to parents reminiscing about family vacations.
'I don't want the AI to just handle tasks, but to actually give you more mental space so you can unplug,' Tao said.
Many in the crowd in Tao's backyard said the atmosphere in Hangzhou, set on the banks of a lake that was muse to generations of Chinese poets and painters, fueled their creativity.
Lin Yuanlin started his company, Zeabur, while studying at Zhejiang University. His company provides back-end systems to people who are making apps and websites by 'vibecoding,' or using AI tools to program without deep software knowledge.
Liangzhu is the perfect testing ground for his product, Lin said. He can lean over to someone in a coffee shop or wander into a neighbor's living room and learn what kind of support they need for their startups. Lin found himself going to Liangzhu so often that he moved there.
Liangzhu villagers have been hosting film nights. They had recently gathered to watch 'The Matrix.' Afterward, they decided the movie should be required viewing, Lin said. Its theme — people finding their way out of a vast system controlling society — provided spot-on inspiration.
Aspiring founders in Liangzhu, even those who did not go to top universities, believe they could start the next world-changing tech company, Tao said.
'Many of them are super brave to make a choice to explore their own way, because in China that is not the common way to live your life.'
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This means New Delhi needs to start thinking now about how to mitigate the possible deleterious implications—especially for water security, the environment and geopolitics.'advertisementThe Brahmaputra is a vital artery that sustains millions across four countries—China (50.5 per cent), India (33.6), Bangladesh (8.1) and Bhutan (7.8). More than just a waterway, it sustains agriculture, drinking water and energy needs, making any disruption to its flow a serious concern. For India, the primary worry is China's ability to control the Brahmaputra's flow. If Beijing releases excess water during monsoons, devastating floods could ravage India's northeastern states, particularly Assam and Arunachal Pradesh, where nearly 40 per cent of the land is already flood-prone. The fallout—mass displacement, infrastructure collapse and economic devastation—would be restricting water flow during dry months could cripple agriculture, hydropower generation and drinking water supplies. Given that the Brahmaputra accounts for nearly 30 per cent of India's freshwater resources, any interference poses a strategic threat. 'The proposed hydropower project has the potential to alter the flow dynamics of the Yarlung Tsangpo-Brahmaputra, affecting water availability, by influencing both groundwater and surface water levels,' warns Genevieve Donnellon-May, a researcher at the Oxford Global For Assam, the implications for agriculture are particularly alarming. The river's nutrient-rich sediments sustain rice, tea and jute cultivation. Any disruption—excessive flooding or drought—could slash crop yields, threaten food security and financially cripple thousands of farmers. If upstream damming reduces sediment flow, it could accelerate riverbank erosion, degrade soil fertility and leave lasting ecological concerns over China's hydropower ambitions are well founded. In 2000, severe flooding in Arunachal Pradesh's Pasighat was linked to a dam collapse on Tibet's Yigong River. In 2012, the Siang River mysteriously ran dry, prompting then chief minister advisor Tako Dabi to blame China's dams. In 2016, China blocked the Xiabuqu River near India's border for the Lalho hydropower project, further raising suspicions. A year later, the Siang's waters turned black, igniting accusations against China. While Beijing dismissed the claims, satellite images later revealed that earthquakes on the Tibetan Plateau had triggered landslides, sending sediment downstream. 'Storing water in a region with extensive mineral extraction—Tibet is home to over 100 exploited minerals—leads to contamination as mining runoff mixes with the water, forming black soot. Arunachal Pradesh has already seen instances of blackened water,' says Srikanth Kondapalli, professor of Chinese Studies at Jawaharlal Nehru University. Adding to the uncertainty, open-source data from the Tibetan Autonomous Region suggests irregular river flow patterns in 2024, deviating from the trends of the past 25 raises even deeper concerns is China's broader ambition—to divert the Yarlung Tsangpo to its arid Xinjiang province. Gopal Dhawan, founder and chairman of the Dr Dhawan Academy of Geologists, and former CMD, Mineral Exploration and Consultancy Ltd and NHPC, warns that if China stores and redirects water through an inter-basin transfer scheme, 'any projects we develop will face water shortages and be adversely affected.' Though several experts rule out any such possibility, doubts persist. 'The Medog dam appears to be a hydroelectric project rather than a water storage and diversion initiative. But given China's track record of undertaking large-scale infrastructure projects, such a possibility cannot be ruled out,' says A.K. Bajaj, former chairman of the Central Water Commission. 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Over two decades, Beijing has constructed 12 massive dams along the river's upper reaches, disrupting natural flows and worsening environmental stress downstream. In 2019, despite above-average rainfall, China's upstream dams hoarded record amounts of water, triggering droughts in Thailand, Cambodia and Vietnam. In 2021, it slashed the Mekong's flow by 50 per cent for three weeks—citing power-line maintenance—without prior notice, leaving millions struggling for irrigation, fisheries and drinking water. These unilateral actions stoke fears that Beijing could deploy similar tactics on the Medog dam isn't an isolated project but part of a grand strategy. Sayanangshu Modak, a doctoral researcher at the University of Arizona's School of Geography, Development and Environment, says the Yarlung Tsangpo stretch was marked for hydropower as early as 2003. Since the 2010s, China has steadily expanded its hydropower footprint on the Brahmaputra's upper reaches. 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This includes enhancing independent river flow monitoring from China using advanced satellite technology, refining flood risk assessments and upgrading telemetry stations. Gamble points out that India lags behind China in studying Himalayan ecology and river systems. 'India has yet to thoroughly analyse the flow data China has provided on the Yarlung Tsangpo. Instead of issuing threats over dam construction, India must invest in a deeper understanding of the region's hydrology and risks. Armed with this knowledge, it can engage China in informed negotiations, presenting concrete evidence on the downstream impacts,' she and China share several major rivers, including the Brahmaputra, Sutlej and Indus. However, water-sharing remains a contentious issue, in the absence of a formal treaty. Despite China's upper riparian advantage, India can push for stronger data-sharing commitments under international conventions like the UN Watercourses Convention, which mandates that no country can take actions significantly harming another. However, neither India nor China is a signatory, and no Brahmaputra basin nation has ratified the 2014 UN Convention on Non-Navigational Water Uses, rendering first-user rights the Brahmaputra's turbulent waters, survival will depend not on the might of dams but on the foresight of nations.—with India Today NE BureauSubscribe to India Today Magazine- EndsMust Watch
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