Shanghai, China’s financial hub, has announced a 1 billion Yuan ($139 million) subsidy programme to boost its artificial intelligence (AI) industry. This aims to strengthen its position in the national AI race, according to the South China Morning Post (SCMP).

The programme is designed to help AI startups cut costs. It also aims to make it easier for local businesses to integrate AI solutions into their operations. Out of the total package, 600 million Yuan (over $82 million) will be allocated for subsidising computing power. Furthermore, 300 million Yuan (over $40 million) will be set aside for discounts on third-party AI model usage. Lastly, 100 million Yuan (over $13 million) will go for procuring data or training new AI models.

Startups and companies will be eligible for subsidies ranging from 10% to 100%. These are intended for renting, purchasing, or building computing facilities, as well as AI models and data sets. The Shanghai Municipal Commission of Economy and Informatisation said these measures aim to drive investment in AI infrastructure. They also promote innovation.

Pan Helin, a member of an expert committee under China’s Ministry of Industry and Information Technology, noted that the initiative will help young AI entrepreneurs. It helps them cope with high living costs and office rents in Shanghai. These costs often prompt them to relocate to cheaper cities like Hangzhou.

Shanghai has been developing its AI ecosystem for years. It aims to expand it into a 400 billion Yuan ($55 billion) industry by 2025, according to the city government. Meanwhile, several major Chinese cities have also been investing heavily in AI. This has led President Xi Jinping to caution against overcrowding in similar sectors.

“When it comes to launching new projects, it’s always the same few things…AI, computing power, new-energy vehicles,” Xi remarked during a meeting in Beijing on 17th July.

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