US and China Pour Record Capital into AI Amid Intensifying Funding Race

The artificial intelligence sectors in the United States and China are experiencing unprecedented capital inflows, turning AI funding into a high-stakes competition between the world's two largest economies. Global AI startups raised $255.5 billion in Q1 2026 alone, while Chinese ventures secured over 110 billion yuan ($16.2 billion) separately.

China's Ministry of Science and Technology has aggressively fueled the boom through a national venture capital guidance fund targeting early-stage, hard-tech enterprises—including AI, semiconductors, and advanced manufacturing—with an estimated total scale of 1 trillion yuan ($144.45 billion). Government-linked investors participated in 140+ AI deals in 2025, a dramatic surge from pre-2018 levels of 10 deals annually.

Collaborations with financial institutions and local governments have spawned additional funds exceeding 350 billion yuan, spanning tech-industry integration and secondary markets. Notably, DeepSeek is poised for its first external investment round led by China’s Integrated Circuit Industry Investment Fund, signaling deepening state-backed commitments to AI dominance.