From Chatbots to Smart Toys: The Rapid Rise of AI in China

Timmy, an eight-year-old boy, murmured to himself as he tried to beat a chess robot with artificial intelligence. However, Timmy and this robot were living on a coffee table in a Beijing apartment, not in an AI showroom or laboratory. Timmy gave his little robot friend a big hug before going to bed the first night it returned. He doesn't have a name for it – yet.

The youngster pointed to the chessboard and told his mother, "It's like a little teacher or a little friend," as he considered his next move. Moments later, the robot chimed in: "Congrats! You prevail. It continued in Mandarin, "I've seen your ability, I will do better next time," before moving the pieces around and blinking its round eyes on the screen to begin a new game. In its effort to become a technological superpower by 2030, China is adopting AI. The revolutionary Chinese chatbot known as Deep Seek, which attracted the attention of the entire world in January, was only the initial indication of that goal. Money is pouring into AI businesses seeking more capital, fuelling domestic competition. There are more than 4,500 firms developing and selling AI, schools in the capital Beijing are introducing AI courses for primary and secondary students later this year, and universities have increased the number of places available for students studying AI.

"This is an inevitable trend. We will co-exist with AI," said Timmy's mum, Yan Xue. "Children should get to know it as early as possible. It should not be rejected. She decided that the robot's $800 price tag was a good investment because it does both chess and the strategy board game Go, which she wants her son to learn. The program's creators have already planned to include language tutoring.

When the Chinese Communist Party said in 2017 that AI would be "the main driving force" of the country's progress, perhaps this was what they were hoping for. As China's economy slows and is hit hard by tariffs from its biggest trading partner, the United States, President Xi Jinping is betting big on it. As Beijing competes with Washington for a technological advantage, it intends to invest 10 trillion Chinese yuan ($1.4 trillion; £1 trillion) in the next 15 years.

AI funding got yet another boost at the government's annual political gathering, which is currently under way. A 60 billion yuan AI investment fund was established in January, just a few days after the United States increased export controls for advanced chips and added more Chinese companies to a trade blacklist. However, Deep Seek has demonstrated that Chinese businesses can overcome these obstacles. And that's what has stunned Silicon Valley and industry experts – they did not expect China to catch up so soon.

A race between dragons :

After promoting his company's chess-playing robot at various competitions for six months, Tommy Tang has grown accustomed to this response. Timmy's machine is made by the same company, Sense Robot, which has many different abilities. In 2022, Chinese state media praised an advanced version that beat chess Grand Masters. "After asking about the cost, parents will inquire about where I am from. They expect me to come from the US or Europe. Mr. Tang said with a smile, "They seem surprised that I'm from China." "When I say I'm from China, there will always be one or two seconds of silence." His company has sold more than one hundred thousand robots and has a contract with Costco, a major US supermarket chain.

China's young people are a key factor in its engineering success. STEM (science, technology, engineering, and math) degrees will be awarded to more than 3.5 million students nationwide by 2020. That's more than any other country in the world - and Beijing is keen to leverage it. "Building strength in education, science and talent is a shared responsibility," Xi told party leaders last week.

Abbott Lyu, vice president of Whales bot, a Shanghai-based company that produces AI toys, claims that China has "been through a process of accumulating talent and technology" ever since it opened its economy to the outside world in the late 1970s. "In this AI-driven era, we have a lot of engineers who work hard." A dinosaur made of bricks of various colors roars to life behind him. A seven-year-old is creating the code on a smartphone to control it. The company is developing toys to help children as young as three learn code. Every package of bricks comes with a booklet of code. After that, children can learn how to build whatever they want. The cheapest toy sells for around $40.

Mr. Lyu insists, "Other countries also have AI education robots, but China is doing better when it comes to competitiveness and smart hardware." He added that Deep Seek's success "is worth 10 billion yuan of advertising for [China's] AI industry" and made CEO Liang Wenfeng a national hero. "It has let the public know that AI is not just a concept, that it can indeed change people's lives. It has piqued the interest of the public." The internet has dubbed six domestic AI companies, including Deep Seek, "China's six little dragons." The others are Unitree Robotics, Deep Robotics, Brain Co, Game Science, and Manycore Tech.

Some of them were at a recent AI fair in Shanghai, where the biggest Chinese companies showcased their innovations, including search and rescue robots and a dog-like robot that could do a backflip. Two teams of humanoid robots competed in a football match, complete with red and blue jerseys, in one crowded exhibition hall. One of the machines was even taken off the field in a stretcher by their human handler, who was eager to keep the joke going when the two machines clashed and fell. In the wake of Deep Seek, it was hard to miss the sense of excitement among developers. Yu Jingji, a 26-year-old engineer, stated, "Deep seek means the world knows we are here."

Some of them were at a recent AI fair in Shanghai, where the biggest Chinese companies showcased their innovations, including search and rescue robots and a dog-like robot that could do a backflip. Two teams of humanoid robots competed in a football match, complete with red and blue jerseys, in one crowded exhibition hall. One of the machines was even taken off the field in a stretcher by their human handler, who was eager to keep the joke going when the two machines clashed and fell. In the wake of Deep Seek, it was hard to miss the sense of excitement among developers. Yu Jingji, a 26-year-old engineer, stated, "Deep seek means the world knows we are here."

Therefore, the engineering problem lies in producing more with less. Mr. Tang stated, "This was our Mission Impossible." His company discovered that the robotic arm used to move the chess pieces was extremely expensive to produce, amounting to approximately $40,000 in cost. As a result, they tried utilizing AI to assist engineers in their work and improve manufacturing processes.

Mr. Tang asserts that this has brought the price down to $1,000. He declares, "This is innovation." "The manufacturing process now incorporates artificial engineering." As China implements AI on a large scale, this could have huge repercussions. State media already show factories full of humanoid robots. In January, the government said that it would promote the development of AI-powered humanoid robots to help look after its rapidly ageing population.

Xi has repeatedly declared "technological self-reliance" a key goal, which means China wants to create its own advanced chips, to make up for US export restrictions that could hinder its plans.

The Chinese leader knows he is in for a long race – the Beijing Daily recently warned that the Deep Seek moment was not a time for "AI triumphalism" because China was still in "catch-up mode".

President Xi is investing heavily in artificial intelligence, robots and advanced tech in preparation for a marathon that he hopes China will eventually win.