Executive Summary

DeepSeek’s emergence as a successful generative model—a niche where the United States was believed to hold an uncontested lead—is causing global artificial intelligence watchers to reassess China’s standing in the race toward artificial general intelligence (AGI) and pay closer attention to China’s AI research and deployment.

While large models continue to account for a significant part of its AI investment, China’s top state-funded AI institutes are exploring alternative approaches to AGI that involve embodying AI algorithms in real environments. Imbued with the Chinese Communist Party’s pre-defined values, the AI interacts with its natural surroundings, learning as it proceeds.

The test bed for this proactive approach to AGI is China’s inland city of Wuhan, where the Chinese Academy of Sciences’ (CAS) Institute of Automation, Huawei, and a Peking University consortium are infusing the city’s industrial and commercial enterprises with AI services and deploying a “social simulator” that expands AI’s reach to all aspects of daily life.

The intent is to optimize production and supervise social interaction while affording the AI opportunities to become more intelligent, catalyzing its evolution into AGI. The Wuhan implementation is seen by its state-backed entities as a stepping stone to deployment throughout China, raising questions about the type of technosociety with which the United States needs to compete.