Why Xi Jinping Chose Shanghai to Talk About AI

In late April 2025, Chinese President Xi Jinping made a high-profile visit to Shanghai, where he emphasized the importance of artificial intelligence (AI) development. Coming just days after he chaired a Politburo study session on AI, this move drew widespread attention. Why Shanghai? And why now? For global observers, especially those tracking China’s tech ambitions, Xi’s choice carries symbolic, strategic, and practical weight. This article examines the deeper meanings and implications of Xi’s remarks on AI in Shanghai—covering geopolitical signals, policy shifts, industrial consequences, and international dimensions.

1. Shanghai’s Symbolism: Tech Powerhouse and Political Showcase Xi’s decision to highlight AI in Shanghai underscores the city’s central role in China’s innovation ecosystem. As China’s financial hub and gateway to international trade, Shanghai has been repositioning itself as a global AI center. The city hosts the World Artificial Intelligence Conference (WAIC) annually and recently announced plans to build a world-class AI industrial cluster worth over RMB 400 billion (~$55 billion) by 2025.

During his visit, Xi toured the Shanghai Artificial Intelligence Laboratory and the newly formed Foundation Model Innovation Center, home to over 100 AI companies. His message was clear: Shanghai should lead in both AI development and governance. Xi’s endorsement effectively elevates the city as a national demonstration zone for AI breakthroughs, signaling a broader push to align local innovation ecosystems with national strategic priorities.

2. Policy Signals: Toward a New Phase of China’s AI Strategy Xi’s remarks are not just symbolic—they mark a new phase in China’s national AI strategy. In the April 25 Politburo study session, he emphasized the need to "leverage the new whole-nation system" to achieve breakthroughs in foundational AI technologies, including core chips, foundational software, and open-source frameworks.

The message? China is doubling down on self-reliance. AI is now being treated as a core national security issue. Xi acknowledged that China still lags behind in basic research and core technologies, urging urgent efforts to close the gap. He also called for greater infrastructure investment in computing power and data sharing, aiming to build an indigenous AI ecosystem from the ground up.

At the same time, governance and safety are being elevated in policy planning. Xi stressed the need to build legal and ethical frameworks, improve risk management, and ensure that AI technologies remain “safe, reliable, and controllable.” Taken together, these directives suggest China is moving beyond the 2017-era focus on AI applications and toward a more mature model: investing in hard tech, managing systemic risks, and asserting leadership in setting norms.

3. Impact on China’s AI Industry: Boosting Confidence and Capital Xi’s focus on AI is likely to supercharge the domestic industry. For leading tech firms like Baidu, Huawei, and Alibaba, the speech reinforces expectations of policy support, R&D subsidies, and government procurement opportunities. The AI sector responded favorably in the stock market, with major AI-related indices rising on the news.

Equally significant is the potential boost for startups and talent. By placing AI at the heart of national strategy, the government is sending a strong signal to investors and entrepreneurs. Startups focused on large models, vertical applications, or edge AI may benefit from funding and regulatory green lights. Talent-wise, Xi’s emphasis on "AI as a field for the youth" and his interaction with young founders and foreign experts in Shanghai signal a more open, globalized approach to human capital.

His visit also highlights the role of foreign participation in China’s AI ecosystem. A French AI founder based in Shanghai was granted permanent residency days before Xi’s speech, symbolizing China’s push to attract global talent despite geopolitical tensions.

4. Global Stakes: AI and the U.S.-China Tech Race Internationally, Xi’s timing and tone carry strategic weight. The U.S. has tightened restrictions on high-end chips and AI tools, aiming to slow China’s progress. In response, Xi’s speech emphasized self-sufficiency, urging China to achieve "independent and controllable" innovation in key AI components.

China is also pushing to shape global AI governance. Xi described AI as a "global public good" and proposed that China work with developing nations to close the digital divide. The message is twofold: China wants to reduce dependence on U.S. technologies, and it also seeks to offer an alternative vision for global AI standards.

Recent data supports China’s rising AI capabilities. According to the World Intellectual Property Organization, China filed the most patents globally in generative AI between 2014 and 2023. Tsinghua University and Stanford reports suggest that Chinese labs are narrowing the gap with U.S. counterparts in large model development. Xi’s speech positions China to translate this momentum into diplomatic influence and technical standard-setting.