China’s core artificial intelligence (AI) industry is projected to surpass 1.2 trillion yuan in 2025 (about $170 billion), up from more than 900 billion yuan in 2024, according to a new industry assessment.

The estimate was outlined in a report released by the China Academy of Information and Communications Technology (CAICT), an institute affiliated with the Ministry of Industry and Information Technology, during an industry forum in Beijing. The report said the value of China’s core AI sector had already exceeded 900 billion yuan in 2024 and is expected to cross the 1.2 trillion yuan mark, or about $170 billion, in 2025.

CAICT noted significant advances in AI capabilities over the past year, with language performance improving by about 30% and multimodal understanding by around 50%. The academy described the current period as a turning point, where AI is moving beyond technical innovation to become a productive force delivering tangible real-world outcomes.

The report also highlighted the growing use of large language models in manufacturing. Since the start of the year, the share of AI application scenarios in the manufacturing sector has risen from 19.9% to 25.9%, reflecting faster adoption across industrial processes.

In parallel, the integrated AI and robotics sector is expanding rapidly. CAICT said more than 350 companies are now active across this industrial chain, with around 40 billion yuan in financing channelled into the sector in 2025, underlining strong investor interest and policy support.

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