Report: Shanghai rising as leader in AI integration

In light of factors such as its explosive growth in artificial intelligence at an industrial scale and the fact that Shanghai is home to approximately a third of Chinese AI professionals, the city is rapidly establishing itself as a hub for AI, particularly in the integration of AI with manufacturing, said a recent report.

As of Dec 24, a total of 139 large AI models had completed registration in Shanghai. The city is also home to nearly 300,000 AI professionals — representing roughly one-third of the nation's total talent pool, said the report, which was released at a conference on Thursday in Shanghai.

Shanghai's AI sector is seeing explosive growth. According to the report, in the first nine months of 2025, the combined output of the city's 394 AI enterprises above designated size — defined as those with annual revenue of 20 million yuan ($2.86 million) or more — hit 435.49 billion yuan, surging 39.6 percent year-on-year. Over the same period, these firms' aggregated profits rose 11.4 percent year-on-year to reach 40.78 billion yuan.

Concluding with the construction progress of Shanghai's modern industrial system, the report focuses on policy deployment, application scenarios with technological breakthroughs, and ecosystem development, said Wu Xiaodong, vice-president of the Shanghai Industrial Internet Association.

"Through systematically reviewing Shanghai's practical experience and implementation models in AI manufacturing, the white paper analyzes opportunities and challenges, as well as offers policy recommendations," Wu said.

"Shanghai will promote large-scale development of AI manufacturing during the 15th Five-Year Plan (2026-30) period," said Zhang Ying, deputy secretary-general of the Shanghai municipal government.

Through coordinated efforts across industry, academia, research and application, Shanghai is advancing industrial models, industrial intelligent agents and intelligent equipment products. These efforts are driving innovation in manufacturing organization models, deepening scenario integration and forming an innovation framework that links technology, application scenarios and ecosystems, Zhang said.

Enterprises have seen many concrete benefits from AI adoption. "AI applications have proved highly effective, whether in accelerating design processes, shortening product delivery times, reducing costs or improving success rates," said Gu Guifeng, vice-president of Shanghai Kaiquan Pump (Group) Co Ltd.

"Taking traditional hydraulic model design as an example, previously, a researcher with 10 to 15 years of experience would need at least one month to design multiple models and conduct optimization tests, while simulation calculations alone could take at least one week. With AI assistance, engineers can now design the most effective hydraulic model within 24 hours," said Gu.

AI has also delivered significant cost savings, as developing and deploying a high-quality hydraulic model typically requires an investment of more than 3 million yuan."By maximizing the use of accumulated data and validation results, AI significantly reduces verification and trial costs," Gu said.

Yu Fangqiang, chief information officer of Shanghai Construction Group, said that although AI currently accounts for only about 10 percent of the group's daily operations, its future potential is virtually unlimited.

"While the application of AI may take time to move from consumer sectors into construction, enterprises must proactively embrace it," Yu said.

Shanghai's latest AI manufacturing achievements come as the Ministry of Industry and Information Technology and seven other central government departments issued the implementation guidelines for the special action on AI manufacturing on Jan 7. The document sets a target of achieving a secure and reliable supply of key AI technologies, along with globally leading industry scale and empowerment capacity, by 2027.

The guideline specifies a roadmap for achieving AI integration in manufacturing, which includes the widespread application of three to five general large AI models in the sector by 2027. Additionally, it aims to promote 500 typical application scenarios, cultivate two to three leading globally influential enterprises, and create a robust ecosystem for AI-enabled manufacturing. These efforts are designed to contribute to the global integration of AI and manufacturing, offering China's solutions for this transformation.