China's AI Hardware Market Poised for Significant Growth, Driven by Domestic Innovation and Diverse Product Range

Introduction: A New Era of Tangible AI

China is experiencing a rapid expansion in its Artificial Intelligence (AI) hardware sector, with Chinese firms making significant strides in developing and deploying tangible AI products. This includes a diverse range of innovations such as AI-enhanced glasses, autonomous cleaning devices, and advanced robotic helpers. The country's AI hardware market, excluding smartphones and cars, is projected to achieve an impressive 18% annual growth through 2030, building on an estimated market size of $153 billion in 2025. This growth underscores a strategic shift towards embedding AI into physical products for daily life and industrial applications.

Strategic Drivers and Domestic Capabilities

The robust growth in China's AI hardware market is underpinned by comprehensive national strategies and substantial investments. Initiatives like the 'Next-Generation AI Development Plan' launched in 2017 and 'Made in China 2025' aim to establish China as a global AI leader by 2030 and achieve self-reliance in core technologies. The 'AI Plus' policy, issued in August 2025, further accelerates the application of AI across various economic sectors. This strategic framework is complemented by significant government support and investments in research and development, fostering a robust AI ecosystem that integrates infrastructure, data, talent, and innovation, including advanced 5G networks and green data centers.

A key focus is reducing dependence on foreign supply chains, particularly in semiconductor technology. China has begun compiling a list of government-approved AI hardware suppliers, prioritizing domestically developed processors from companies such as Cambricon and Huawei. This push for self-sufficiency has seen notable successes, with Chinese firms like Zhipu AI demonstrating the capability to train advanced AI models entirely on domestic hardware, specifically Huawei's Ascend processors, proving the viability of competitive AI systems without reliance on Western chips.

Expanding Horizons: Diverse AI Hardware Applications

Chinese companies are showcasing a wide array of AI-enabled devices across consumer, industrial, and automotive sectors. At events like the Consumer Electronics Show (CES), Chinese firms presented innovations including:

• Smart grooming tools and emotion-sensing toys
• Autonomous home cleaners and robotic assistants for elderly care
• AI-enhanced glasses and automotive displays

Beyond consumer products, the application of AI in robotics is particularly strong, with the development of industrial robotics, as well as humanoid and quadruped robots capable of real-time interaction and complex industrial tasks. For instance, the Expedition A1 robot has been deployed in 3C electronics manufacturing and automotive assembly lines. Leading companies such as DJI in drones and Appotronics in laser displays are actively integrating AI into their products. Furthermore, major players like Huawei and Xiaomi are at the forefront of innovations in smart home devices and autonomous vehicles.

Market Outlook and Economic Impact

The projections for China's AI hardware market indicate sustained and substantial growth. While the AI hardware market (excluding smartphones and cars) is expected to grow 18% annually through 2030 from $153 billion in 2025, the broader China AI in Hardware Market is projected to expand from $39.2 billion in 2025 to $118.7 billion by 2031, at a compound annual growth rate (CAGR) of 20.1%. The overall China Artificial Intelligence market is anticipated to reach $104.7 billion by 2030, with a CAGR of 20.12% from 2024.

This growth is also reflected in the country's computing power. China's intelligent computing power is estimated to reach 1,037 exaflops in 2025, with projections to nearly triple by 2028. The compound annual growth rate for intelligent computing between 2023 and 2028 is projected at 46.2%. This rapid advancement is expected to have a significant economic impact, with PwC estimating that AI could contribute up to $7 trillion to China's GDP by 2030. The nation's strategic focus on tangible AI products and domestic technological independence positions it as a formidable force in the global AI landscape.