China's AI capital spending set to reach up to US$98 billion in 2025 amid rivalry with US
Capital expenditure on
artificial intelligence (AI) in China is forecast to reach 600 billion yuan to 700 billion yuan (US$84 billion to US$98 billion) this year, according to a
Bank of America (BofA) report, as the mainland and the
United States race for primacy in the vital
technology
That would represent as much as a 48 per cent overall growth this year for China's AI capex from 2024, BofA Securities' co-head of China equity research Matty Zhao, who also heads Asia-Pacific basic materials, oil and gas research at BofA Global Research, said in an interview on Monday.
Government investment is expected to account for up to 400 billion yuan of total AI spending on the mainland, according to the BofA report published earlier this month. China's major
internet companies, meanwhile, are projected to contribute as much as 172 billion yuan.
Spending attributed by BofA to the country's large telecommunications network operators and special-purpose bonds makes up the rest of the forecast AI capex.
The predicted surge in China's AI spending in 2025 reflects the heightened enthusiasm for the technology on the mainland on the back of
DeepSeek 's success.
The
Hangzhou -based
start-up generated worldwide attention earlier this year after consecutively releasing two advanced open-source AI models,
V3 and
R1 , developed at a fraction of the cost and computing power that major tech firms typically require for large language model (LLM) projects. LLM refers to the technology underpinning
generative AI services such as
ChatGPT
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