Shanghai’s AI Industry: Key Strategies for Competing in Full-Stack Capabilities

The Yangtze River Delta forum discusses the competitive landscape of the AI industry in Shanghai amidst a shift from a focus on individual algorithms and models to a comprehensive stack of capabilities. This transition encompasses self-developed chips, high-quality data sets, computational support, model iteration, and commercial implementation. The ability to build a self-controlled and efficient AI ecosystem will likely determine who holds the competitive edge in the future tech and industry landscape.

As part of its 14th Five-Year Plan, Shanghai has strategically elevated AI stack innovation to a citywide priority, delineating a collaborative approach across the entire value chain of “chips, data, computing, models, and applications”. This overarching design not only outlines a developmental blueprint for Shanghai’s AI ecosystem but also positions China favorably in the upcoming wave of intelligent revolution, enhancing its influence over global standards.

Currently, Shanghai enjoys a significant first-mover advantage in stack innovation. However, to achieve seamless integration across the entire value chain and lead the ecosystem, further efforts are required to address critical bottlenecks and deficiencies.

Four Main Pillars Supporting Shanghai’s AI Stack Development

The development of Shanghai’s AI stack ecosystem is firmly grounded in its robust industrial foundation, technological breakthroughs, and diverse open scenarios.

(1) Leading National Industry Scale, Entering the “Scaled Implementation” Phase

Shanghai’s AI industry has achieved remarkable scale advantages, with its ecosystem becoming increasingly refined. By 2025, the scale of Shanghai’s AI industry is expected to exceed 550 billion RMB, demonstrating a growth rate of over 30%. The city boasts a complete industrial and technological chain, hosting nearly 400 AI enterprises and hundreds of thousands of industry professionals, facilitating a tightly-knit industrial ecosystem.

AI-related companies have increasingly accessed capital markets, indicating a growing maturity within the industry. Since the end of 2025, several core AI firms, including Muxi Co., Yingsi Intelligence, and Biran Technology, have successfully listed on the Science and Technology Innovation Board or Hong Kong Stock Exchange. Others, such as Suizhen Technology and Xizhi Technology, are actively preparing for listings, creating a tiered development approach that reflects strong momentum in capital and scale growth.

(2) Establishment of Comprehensive Infrastructure and Core Supply System

Significant breakthroughs in chip technology have accelerated the establishment of core performance advantages for the future. Shanghai has made leading advancements in next-generation chip technology, exemplified by the creation of the world’s first all-optical computing chip, “LightGen”, by a team from Shanghai Jiao Tong University, achieving a closed-loop in all-optical computation.

The Fudan University team has developed the world’s first two-dimensional semiconductor microprocessor, “Wuji”, with performance surpassing international standards, and has successfully created the first two-dimensional silicon-based hybrid flash memory chip. Additionally, Shanghai aims for its intelligent computing capacity to reach 200 EFLOPS by 2027, with over 70% of this power being self-controlled.

(3) Diverse Application Scenarios Empowering Significant Testing Grounds

Leveraging its strengths as an international financial center, world-class hub, and megacity, Shanghai has established benchmarks for large-scale AI applications in critical sectors. In the fields of port logistics and advanced manufacturing, AI enhances the operational efficiency of complex systems. For instance, the Shanghai Port Group has integrated the DeepSeek model into its “Container Transportation MaaS” platform, achieving a 40% improvement in resource allocation efficiency.

In finance, AI is revolutionizing service models, with institutions like China Construction Bank introducing intelligent humanoid robots as lobby managers, and Shanghai Bank implementing AI-driven mobile banking services that improve transaction conversion rates. Additionally, public services are enhanced through AI, with initiatives like the “AI-Assisted Health Profiling” in Jing’an District analyzing multidimensional health data.

(4) Innovative Policies Leading to Global Connectivity

Shanghai continuously promotes the World Artificial Intelligence Conference (WAIC) as a key international platform for AI resources. The upcoming WAIC 2025 is anticipated to attract over 800 companies, with more than 50% from outside the city and international participants. The conference aims to facilitate over 45 billion RMB in project agreements, establishing itself as a vital link between cutting-edge concepts and local industrial practices.

Through a policy mix of “parent fund guidance + targeted element subsidies,” Shanghai has established a substantial leading industry fund to effectively engage social capital. By January 2026, this fund had made investment decisions totaling approximately 41 billion RMB, leveraging social capital nearly fivefold.

Transforming Stack Advantages into Systematic Strengths

Despite a solid foundation, Shanghai must focus on enhancing collaboration, open-source ecosystems, and data elements to fully realize its stack capabilities.

(1) Building an “AI Stack Collaborative Empowerment Platform”

It is essential to adopt an implementation path that emphasizes “government leadership, platform organization, and ecological collaboration” to address structural contradictions. The integration of existing public capabilities and market entities will focus on overcoming the challenges of a complete supply chain lacking collaboration.

(2) Strengthening Global AI Connectivity and Talent Pooling

To enhance the WAIC from an “annual event” to a “regular attraction platform,” it’s crucial to solidify its operational effectiveness throughout the year, creating an online ecosystem that encompasses cutting-edge results and benchmarking cases. This includes fostering collaboration among districts to regularly host technology forums, hackathons, and developer salons.

(3) Tackling High-Quality Data and Breaking Down Data Silos

Implementing targeted actions for high-quality data collection is vital for establishing a robust AI training foundation. By focusing on knowledge-intensive sectors such as finance and healthcare, Shanghai aims to create a large-scale supply of high-quality data resources.

Furthermore, a “Data Elements Circulation Coordination Working Group” will be established to promote standards and eliminate barriers between public and industrial data, ensuring a continuous and diverse flow of AI training data.