China's NDRC Moves to Curb Wasteful AI Investment

The National Development and Reform Commission announced plans to curb disorderly competition and wasteful investment within China's artificial intelligence sector. During a Friday briefing, official Zhang Kailin stated that the government will guide provinces to develop AI in a coordinated and complementary manner based on local resources to avoid duplicating efforts.

This strategic shift follows warnings from President Xi Jinping regarding excessive local government spending. Beijing aims to prevent the overcapacity and deflationary pressures previously experienced in the electric vehicle industry while maintaining AI as a critical growth driver and a primary area of competition with the United States.

To foster innovation, the NDRC vowed to improve national-level planning and increase support for private companies to create innovative dark horses, citing the success of startups like DeepSeek. Simultaneously, the government is implementing measures to broaden private investment in traditional infrastructure, such as nuclear power and railways, by establishing minimum private shareholding requirements to bolster overall economic growth.