China has unveiled an $8.2 billion artificial intelligence funding initiative aimed at strengthening its domestic AI ecosystem and reducing reliance on U.S. semiconductor firms like Nvidia (NVDA, Financial) and Broadcom (AVGO, Financial).

The new state-backed AI Industry Investment Fund will prioritize early-stage projects while also targeting core parts of the AI supply chain, including computing infrastructure, algorithms, data resources, and applications. Robotics will also be a major area of focus.

A large portion of the funding is being drawn from the third phase of the China Integrated Circuit Industry Investment Fund, widely known as the “Big Fund.” This fund was created to accelerate China's push toward chip self-sufficiency amid escalating trade friction and export controls on advanced Western technologies.

The move underscores Beijing's strategic approach to AI development, in contrast to the market-driven models seen in the U.S. According to TechInAsia, China surpassed the U.S. in global AI startup funding back in 2017 and is pursuing its goal of building a $150 billion AI industry by 2030, with projections that it could generate nearly half of the global AI-related economic value by then.

The rise of firms like DeepSeek and China's growing AI independence have served as a warning to U.S. tech leaders. Nvidia, Broadcom, and Microsoft (MSFT, Financial) are all watching closely as China ramps up its state-backed ambitions.