Beijing accelerates a historic $28 trillion funding drive through domestic capital markets to bolster its artificial intelligence and semiconductor sectors, aiming for technological self-sufficiency amid global supply chain pressures.
China is stepping up a broad effort to finance its artificial intelligence and semiconductor industries through the country’s vast domestic capital markets, as Beijing tries to reduce exposure to foreign technology restrictions and strengthen control over key parts of the supply chain. The Taarifa report said the plan involves mobilising about $28 trillion in equity and bond markets, marking a shift away from reliance on direct subsidies and tax breaks.
The strategy reflects a wider policy push to channel household savings, state-linked funds and market listings into what Chinese officials increasingly describe as strategic technologies. According to South Korean newspaper Sedaily, the government has been setting up investment vehicles to redirect shorter-term capital flowing into AI towards longer-term semiconductor development, part of a deliberate move towards so-called “patient capital”.
That approach comes as China races to build out its own AI infrastructure. Tom’s Hardware reported that Beijing is drafting a five-year plan worth roughly $295bn to create a nationwide network of AI data centres, with a target of sourcing at least 80% of the technology from domestic suppliers such as Huawei. The outlet said the project is intended to cut dependence on foreign chips and other imported components, although limited domestic supplies of high-bandwidth memory could constrain production of advanced AI accelerators.
The financing drive is being reinforced by large state-backed industrial funds. The South China Morning Post reported last year that the third phase of China’s Integrated Circuit Industry Investment Fund, known as the Big Fund, was launched with registered capital of 344 billion yuan, or about $47.5bn, to support major contract chipmakers as well as equipment and materials suppliers. A separate analysis published by ChinaBizInsider said the three phases of the fund together amount to nearly RMB700bn, or about $97bn, in state capital support for semiconductors and AI.
The push comes against a backdrop of surging demand for chips worldwide as AI spending accelerates. Investing.com reported that China’s chip industry is expanding rapidly as manufacturers increase capital spending and production capacity, with output at mature process nodes projected to rise sharply by 2028. But the same demand boom is also straining supply chains for raw materials and high-end components, making control over financing and domestic production capacity a central part of Beijing’s technology strategy.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
