The race to lead artificial intelligence is entering a new stage. It is no longer just about building smarter AI models or faster chips. It is also about who can raise money faster to keep innovation moving.
China is betting that its $28 trillion capital markets can help it close the gap with the United States. The plan reduces China’s reliance on government subsidies. Instead, it encourages AI companies and chipmakers to raise money through the country’s capital markets. It is a key part of China’s AI investment strategy. The move comes as China looks to speed up AI development while reducing its dependence on foreign technology.
The change became clear after memory chipmaker CXMT Corp. made its Shanghai stock market debut. The company raised about $9.8 billion through a fast-tracked IPO.Its shares later climbed more than 500%, making it one of the biggest winners in China’s stock market this year. The listing is about more than one company. It shows investors are willing to put billions behind China’s AI and semiconductor industry.
Building AI is like building an airport. You need land, equipment, skilled workers, and years of investment before the first flight takes off. AI companies face a similar challenge. They need billions to buy chips, build data centres, and train advanced models.
Chinese technology companies have raised around $217 billion through IPOs and bond sales over the past two years. That is still lower than the amount raised by US tech firms. But Chinese companies have another advantage: they can often borrow money at much lower interest rates.
Lower borrowing costs leave more money for research and expansion. Lower borrowing costs leave companies with more money. Instead of using it to repay loans, they can invest in AI chips, cloud infrastructure, and new products.
China is also trying to compete on price. UBS estimates that training some Chinese AI models costs less than 10% of what leading global AI companies spend. Many Chinese AI firms also offer lower API prices, making their services more affordable for businesses.
Market Snapshot
$28 trillion — Size of China’s capital markets.
$217 billion — Raised by Chinese tech firms through IPOs and bonds in the past two years.
1.9% average bond coupon — Lower borrowing costs than many US competitors.
$26 trillion — Estimated household savings that could support future AI investment.
More Chinese AI companies are now preparing to enter public markets. Firms such as DeepSeek, MiniMax, Moonshot AI, and Z.AI are laying the groundwork for future listings. Fresh funding could help these companies grow faster. It could also strengthen China’s position in the China vs US AI competition.
Still, money alone will not decide the winner. Companies also need better chips. They need skilled engineers, reliable software, and customers around the world. Funding can help companies grow faster, but it cannot solve every challenge.
Chris Miller, professor at Tufts University and author of Chip War, believes access to capital could become a key factor in the global AI race. As he explains:
“Over the past few years, US firms have had greater access to capital, but financing costs are rising. If Chinese firms secure a durable advantage in capital access, this would provide an advantage, though Chinese domestic compute is still substantially more expensive because of the lower quality of Chinese AI chips.”
This story is bigger than one IPO. China is building a funding system designed to support AI companies for years, not just months. If more startups successfully raise money, the country’s AI industry could become far more competitive.
The AI competition is changing. Success will depend on more than breakthrough technology. It will also depend on steady investment at every stage of AI development. As Bloomberg reported, China is increasingly turning to its capital markets to fund AI and semiconductor growth. This does not guarantee that China will overtake the US. But it shows that the next chapter of the global AI race could be shaped by both innovation and capital.
Author’s Note:
At the New York Press Release, we believe the AI race is no longer driven by technology alone. Strong funding, investor confidence, and long-term planning are becoming just as important. China’s latest strategy shows how financial strength could shape the future of global AI.
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