China's startup ecosystem, which produced several world-leading companies, has been in the news in the recent past about the impact of the government regulations on the big technology firms. However, despite the regulatory shakeups and the COVID-19 pandemic notwithstanding, China has emerged as a powerhouse for artificial intelligence (AI) unicorns, according to Thematic Research at GlobalData, a leading data, and analytics company. GlobalData's research shows that of the total of 45 AI unicorns globally, China has the biggest share with 19 unicorns headquartered in the country. These 19 unicorns are collectively valued at $43.5bn. Priya Toppo, Analyst of Thematic Research at GlobalData, comments: "China is a leading player in AI, with a number of established companies such as Baidu, Hikvision, iFlytek, Tencent, and Alibaba. The country also has a strong AI startup ecosystem, which is evident from the large number of AI unicorns (privately held startup valued at $1bn or more)."

China is by far the world's largest consumer of microchips and semiconductor circuits, importing $200 billion worth of these products annually. But the Chinese authorities worry that the country's reliance on import threatens national security and hampers the development of a thriving technology sector. The state-backed China IC Industry Investment Fund, created three years ago in a bid to support domestic chipmakers, is reportedly in talks with government agencies and corporations to raise at least 150 billion yuan for its second fund vehicle and intends to begin deploying capital in the second half of the year. The country envisions spending those funds over 10 years, investing in a wide range of sectors, from processor design and manufacturing to chip testing and packaging, in hopes to achieve a leading position in semiconductor industry. Internet technology expert Liu Xingliang believes China has a chance to reach the goal.

If the U.S. is leading the way in artificial intelligence, China is playing catch-up and quickly emerging as an AI hotbed thanks to its talent, government support and venture capital funding. Chris Nicholson, a former Bloomberg news editor, co-founded artificial intelligence firm Skymind in San Francisco in 2014 and started expanding it outside the U.S. last year. Since Tencent is a big investor of his company, Nicholson assembled a team of four engineers in Fujian, a southeastern province in China, and plans to open another China office next year in Shenzhen, where Tencent is headquartered. "We saw lots of interest in AI in China, and the sector is moving so fast in the country," said Nicholson, CEO of Skymind. "Beijing supports AI, while Baidu, Alibaba and Tencent are all getting into AI. The U.S. still has the best AI talent, but there are many good engineers and AI researchers in China as well."