China’s AI Industry Shifts Focus to Agents
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China's AI Industry Shifts Focus to Agents
- The Chinese AI industry is transitioning from a focus on large models and computing power to the development and commercialization of AI agents, with a report indicating that AI agents are expected to drive nearly tenfold annual growth in the country's computing demand over the next two to three years.
- This strategic pivot was highlighted in a report by the China Telecom Research Institute, which was cited by China Central Television on Saturday, September 12, 2026.
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China’s artificial intelligence sector is undergoing a significant transformation, moving its primary focus from intense competition in large-scale AI models and raw computing power towards the practical deployment and commercialization of AI agents. This strategic shift was outlined in a report from the China Telecom Research Institute, which was broadcast by China Central Television on Saturday, September 12, 2026.
The report projects that this pivot to AI agents will substantially increase the demand for computing power in China, anticipating a nearly tenfold annual growth over the next two to three years. Inference computing, which involves using trained AI models to make predictions or decisions, is expected to constitute 80% of the country’s total computing power consumption. This indicates a maturing AI landscape where the emphasis is less on foundational model development and more on real-world applications and services.
The China Telecom Research Institute, also known as TeleAI, was established in May 2024 and officially unveiled in July 2024, under the leadership of Professor Xuelong Li, CTO and Chief Scientist of China Telecom. The institute is actively researching AI Flow, World Model, Embodied Intelligence, Large Models, AI Governance, and AI Infrastructure. The country has been rapidly expanding its intelligent computing capacity, reaching 2,185 exaflops by the end of June, a 177% increase from the previous year. China aims to achieve 9,800 exaflops of intelligent computing capacity by 2030, supported by 3.8 trillion yuan (US$532 billion) in cumulative information infrastructure investment between 2026 and 2030. This expansion is partly driven by the “East Data, West Computing” project, launched in 2022, which relocates power-intensive computing workloads to western regions with more affordable land and energy.