China’s AI Boom Powered by a ‘Village’ of Coders at Its Core

In Liangzhu, a quiet suburb of Hangzhou, China, a vibrant community of young AI coders and tech entrepreneurs is rapidly transforming the area into the heart of China’s artificial intelligence boom. What once looked like a peaceful neighborhood now resembles a mini–Silicon Valley, complete with coding events, backyard investor pitches, and buzzing drones overhead.

At the center of this movement is Felix Tao, a former employee of Facebook and Alibaba, who now runs Mindverse, an AI startup. Tao’s home has become a hub for tech enthusiasts—many in their 20s and 30s—who call themselves “villagers.” They work from cafés during the day and collaborate at night, hoping to build successful AI-powered companies.

Hangzhou’s tech ecosystem has long been fueled by giants like Alibaba, DeepSeek, NetEase, and Hikvision. DeepSeek gained global attention in early 2024 when it released a high-performing AI model built at a fraction of the cost typically seen in Silicon Valley. This model and others from Alibaba have ranked among the top open-source AI systems globally, making them accessible for further development. Zhejiang University, located in Hangzhou, plays a critical role in nurturing talent, with many of its graduates now highly sought after by Chinese tech firms.

The “six tigers of Hangzhou”—a group of leading AI and robotics firms including DeepSeek, Game Science, Unitree, and Rokid—represent the city’s growing tech prowess. Game Science made waves with its global hit video game Black Myth: Wukong, while Unitree’s robots gained national attention after performing at a televised Chinese New Year gala. These firms often collaborate, with their founders—most of whom studied at Zhejiang University or worked at Alibaba—meeting informally to exchange ideas.

While local government support through subsidies and tax breaks has helped foster innovation, it has also created challenges. Some founders noted that government ties make it harder to attract foreign investment, particularly amid geopolitical tensions. Investors worry about associations with the Chinese state, especially after scrutiny faced by companies like ByteDance, TikTok’s parent company. As a result, startups are forced to choose between accepting government support and focusing on the Chinese market or independently raising funds to expand abroad—typically in markets like Singapore.

Access to advanced AI chips presents another obstacle. U.S. restrictions have limited Chinese companies' access to powerful chips made by firms like Nvidia. While companies such as Huawei and SMIC are developing domestic alternatives, it remains uncertain whether they can compete with American technology in the long run.

Despite these hurdles, Liangzhu’s tech community continues to thrive. Entrepreneurs like Qian Roy and Lin Yuanlin are using open-source AI to create products like digital mood companions and backend systems for app developers. Tao’s Mindverse aims to reduce users’ mental burden by using AI to manage everyday tasks, such as sending thoughtful emails or messages.

This energetic, creative environment—fueled by the scenic backdrop of Hangzhou and the camaraderie among young techies—has created a unique space for innovation. Even those without elite degrees feel empowered to pursue ambitious dreams. As Tao noted, these young founders are breaking social norms to chart their own paths in a country where entrepreneurship is not always the norm.