China builds a city for AI — 400 startups already call it home

Shanghai has built a full neighborhood for AI, attracting 400 startups, robot tech, and an AI computing supermarket. With bold policies and top talent, it's fast becoming the Silicon Valley of artificial intelligence.

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In a move straight out of a sci-fi script, China has built an entire neighborhood just for artificial intelligence—and it’s already booming. 

Since opening in September 2023, the Shanghai Foundation Model Innovation Center (SMC) has become a futuristic hub for AI innovation, with nearly 400 startups setting up shop in Xuhui District, reports national media network CGTN.

Think of it as the Silicon Valley of the future—only faster, denser, and designed for AI from the ground up.

This AI town has it all: powerful computing chips, brainy robots, self-driving tech, and even something called an “AI computing power supermarket”, where developers can literally shop for processing power like it’s digital fuel.

At the heart of this ecosystem is a full-stack platform that allows researchers and companies to build everything in-house—from chips to models—without needing to rely on foreign suppliers. It’s part of China’s bigger goal to create a fully controllable, homegrown AI industry.

In January 2024, the Shanghai government took things further by launching a new support plan with five public AI service platforms. But the real kicker? Their bold “challenge-and-grant” model: government and big companies post technical problems, and startups compete to solve them for funding. Think Shark Tank, but with code instead of pitches.

So far, the results are stunning. Over 90% of the teams behind these startups come from top global universities or leading tech firms, and 80% of the companies are building industry-specific AI tools—for everything from healthcare to autonomous driving.

In total, over 255 AI firms and 34 certified large AI models are now operating from this zone. It’s also become a magnet for young engineers and developers, making it one of the most talent-rich AI communities in the world.

The SMC isn’t just about building better chatbots—it’s about laying the groundwork for AI-led transformation across industries. As part of what officials call the “nuclear explosion point” strategy, the center aims to create a ripple effect where AI innovation powers breakthroughs in the wider economy.

One developer summed it up perfectly: “This isn’t just about building models. It’s about building the future.”

No, you can’t live there (yet). But if AI is the next big thing, Shanghai may have just built its capital.