A Spike, Not a Pyramid: China's State-Engineered AI Boom (hellochinatech.substack.com)

China’s much-hyped AI funding surge is less a broad-based venture boom and more a state-engineered “spike.” As of Sept. 22, 2025, 764 Chinese AI companies raised a total of Rmb83bn, but capital is brutally concentrated: the top 20 startups grabbed 30% of the pool (11 of those are already unicorns) and each raised a median Rmb1bn, while the remaining 744 firms averaged just Rmb78m apiece. Behind the headline totals are RMB‑denominated funds and state-directed capital reshaping who gets funded and why. For the AI/ML community this matters because the funding signal is now policy-driven as much as market-driven. State capital prioritizes strategic winners, redistributes risk away from private VCs, and incentivizes startups to align with government priorities—boosting resources for targeted areas but narrowing the diversity of bets, experimentation, and independent research. The immediate implications include larger, better-capitalized flagship players, fewer mid-tier opportunities for innovation, altered exit dynamics, and increased concentration risk in China’s AI ecosystem. Researchers, founders, and global observers should expect growth in strategically prioritized domains but also a more top‑down, less pluralistic path for AI development in China.