China's AI ambition takes shape in Shanghai's large model incubator

Nestled on the west coast of the Pacific Ocean, the Shanghai Foundation Model Innovation Center (SMC) has emerged as a global hub for generative AI innovation, embodying China's strategic push to lead artificial intelligence development. Since its inauguration in September 2023, this pioneering ecosystem has attracted nearly 400 AI enterprises across Xuhui District, fostering a vibrant cluster of talent, technology and capital.

A full-stack ecosystem for breakthroughs

At its core, the SMC serves as a one-stop platform bridging cutting-edge research with real-world applications. The community showcases China's latest advancements in AI infrastructure, including hybrid computing chips and general-purpose graphics processing units. These technologies anchor a fully controllable computing stack, reflecting a bold vision to develop domestic AI clusters capable of rivaling international benchmarks.

The space also emphasizes collaboration: in early 2024, the SMC launched China's first "AI computing power supermarket," offering developers access to diversified resources.

Policy innovation fuels growth

Shanghai's government has played a pivotal role in nurturing this ecosystem. In January 2024, the city unveiled a plan featuring five public service platforms to streamline AI development. These policies, combined with the SMC's unique "challenge-and-grant" model – where industry leaders issue R&D challenges for startups to tackle – have accelerated breakthroughs in sectors ranging from healthcare to autonomous driving.

Over 90 percent of the SMC's founding teams hail from top-tier tech firms or elite universities, while 80 percent of startups focus on vertical-specific AI models, reflecting a blend of academic rigor and industrial expertise. This talent pool has turned the community into a magnet for young entrepreneurs, with over 255 AI companies and 34 certified large models now based there.

With plans to expand its "nuclear explosion point" strategy – amplifying AI's transformative impact across industries – Shanghai's experiment offers a blueprint for how cities worldwide can cultivate next-generation tech ecosystems. As one developer put it: "This isn't just about building models. It's about building the future."

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