China Warns Against 'Disorderly' AI Race As Local Tech Giants Chase US Rivals

China's top economic planner has warned that it would prevent excess competition and wasteful spending in its artificial intelligence sector, even as the country's tech giants roll out new AI models at a rapid clip to catch up with their Western counterparts.

"We will resolutely avoid disorderly competition or a 'follow-the-crowd' approach," Zhang Kailin, an official with the National Development and Reform Commission (NDRC), said in a media briefing on Friday, according to a Bloomberg report.

The goal is to leverage China's distinctive strengths to foster growth without duplicating efforts, according to Zhang. The NDRC is responsible for formulating and coordinating the country's economic and social development strategies, policies, and reforms.

The official's remarks echo those of Chinese President Xi Jinping, who cautioned against excessive investment in AI by local governments last month. Observers noted those comments as evidence of Chinese policymakers' desire to avoid a repeat of the overcapacity seen in other emerging industries, such as electric vehicles, which has contributed to deflationary pressures.

Chinese companies, led by Alibaba, Baidu, ByteDance, and DeepSeek, have significantly expanded their AI services this year. Those developments have been funded by the companies themselves, although China has announced a venture capital fund and an action plan to support the growth of the AI industry.

The comments about the AI industry come a month after the Chinese regulator, the State Administration for Market Regulation, instructed food delivery players Meituan, Alibaba's Ele, and JD Takeaway to tone down spending on promotions and discounts.

Meanwhile, top Chinese companies seem to have held up under pressure from U.S. President Donald Trump's tariffs. So far this year, the iShares MSCI China ETF (MCHI) and tech-focused KraneShares CSI China Internet ETF (KWEB), funds that track Chinese stocks listed in the U.S., have gained over 30%, compared to the 10.6% gains in the benchmark S & P 500.

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