China’s ‘Silicon Valley’ is building robots and fortune-telling AI apps at the same time

HANGZHOU, China — In what is sometimes dubbed China's Silicon Valley, tech giants and startups successful Hangzhou are racing to physique cutting-edge chips, robotics and brain-computer interfaces.

Across town, aspiring founders are creating AI pets and fortune-telling apps.

The metropolis connected China's southeastern coast is reinventing itself arsenic an artificial quality hub. A twelvemonth aft the emergence of DeepSeek drew planetary attention, Hangzhou's fast-moving AI country reflects some planetary ambitions and intensifying contention astatine home.

China and the U.S. are moving successful lockstep to make what galore spot arsenic AI's adjacent frontier: carnal applications. From Meta to Tencent, companies are racing to physique "world models" that usage AI to assistance robots move, steer driverless cars, oregon adjacent simulate real-world events specified arsenic clime change.

Beijing identified "embodied intelligence" arsenic 1 of China's aboriginal priorities successful its upcoming Five-Year Plan. In November, the U.S.-China Economic and Security Review Commission, which provides recommendations to Congress, urged Washington to measurement up concern and regulatory approvals for autonomous systems and robotics, informing that China is making accelerated advances successful carnal AI. 

In Hangzhou, spatial quality steadfast Manycore, arsenic good arsenic robot makers Unitree and Deep Robotics – among the city's tech startups known arsenic the "six small dragons" – are preparing to spell nationalist successful Hong Kong oregon mainland China, joining a flurry of AI-related listings.

While ample connection models are trained chiefly connected net information to make substance and images, grooming AI for the carnal satellite requires further inputs specified arsenic weight, texture, structure, temperature, and however objects interact, including the grip oregon unit needed to grip them.

Instead of manually collecting each information points, utilizing AI methods to cipher them volition marque the process overmuch easier and faster, Manycore cofounder Victor Huang told CNBC.

Huang, a erstwhile Nvidia bundle engineer, says his institution uses the California-based company's chips, saying they present superior computing powerfulness per watt – performing champion for the vigor they consume. But helium believes China's cheaper vigor provides an edge, perchance offsetting the usage of little advanced, much power-hungry chips.

For instance, a three-nanometer spot tin trim powerfulness usage by astir 30% compared with five- oregon seven-nanometer chips, but companies tin enactment competitory if their energy costs are 40%-50% lower, helium said.

Computing power, helium added, cannot beryllium viewed successful isolation. It depends connected information quality, vigor proviso and operating conditions. Locating information centers successful colder regions tin prevention energy, portion cleaner information reduces the computing powerfulness needed for training.

Manycore besides open-sourced its spatial AI exemplary – an attack China has embraced implicit galore of the pay-to-use models communal successful the U.S., specified arsenic those offered by OpenAI and Anthropic.

This attack allows the institution to stitchery feedback, Huang said, but limits nonstop gross due to the fact that users are not required to wage for access.

"So you'll get unit from investors," helium said.

Compared with Silicon Valley's fascination with artificial wide quality oregon superintelligence, China's AI propulsion has focused heavy connected applicable applications, from Baidu Map's personalized recommendations to ByteDance's chatbot and adjunct Doubao.

In December, Doubao was China's apical AI app with 155 cardinal play progressive users, astir treble that of its closest competitor, DeepSeek's chatbot, according to concern quality work supplier QuestMobile. Doubao's popularity suggests that idiosyncratic acquisition and inferior whitethorn trump method sophistication.

A looser, experimental civilization is emerging alongside these efforts.

While Hangzhou heavyweights similar Alibaba and DeepSeek are hard astatine enactment connected cutting-edge AI, a leafy, hipster-meets-hacker suburb called Liangzhu has go crushed zero for AI's quirkier side. 

Residents of Liangzhu telephone themselves "villagers," gathering everything from gamified fittingness trackers to ADHD-friendly calendar tools.

Alex Wei, an entrepreneur who moved to Liangzhu successful 2025, is processing an AI app based connected accepted Chinese divination tools. He's funny successful however AI tin conscionable people's affectional needs.

Liangzhu's debased commercialized unit is portion of its appeal. "You tin travel to Liangzhu with 1,000 renminbi ($143) and permission with your merchandise demo," Wei said.

"It's a precise inclusive place. You don't person to person a unicorn merchandise -- you'll find enactment adjacent for a tiny app serving a 1000 people," helium added.

The groundswell of innovation successful Liangzhu has caught the attraction of investors. A monthly "Demo Day" that started successful a surviving country present draws founders and backers from crossed the portion and beyond.

That vulnerability is shaping however startups deliberation astir scale. Many are eyeing overseas users, with immoderate founders hoping to pat into China's hardware proviso chains to connection competitory prices worldwide. Intense home contention and consumers' reluctance to wage for apps person besides pushed startups to look abroad, observers say.

Afra Wang, who writes the Concurrent newsletter connected China and Silicon Valley, said immoderate developers are utilizing AI to flight accepted vocation paths successful evolving occupation markets, moving alternatively to go "superindividuals" who physique profitable businesses independently oregon with tiny teams.

But Wang warned that immoderate businesses are simply patching AI features for selling appeal, from aerial conditioners to mirrors that cheque sunscreen application. She calls immoderate of these "physical AI slop" – playing connected the word for low-quality contented cranked retired by generative AI.

For now, Hangzhou's entrepreneurs are investigating astir each idea, from ratio to comfort, superior to the frivolous, successful a rapidly evolving market.