AI dishes up savings and smiles at KFC and Pizza Hut

Yum China, the operator of popular fast-food franchises like KFC and Pizza Hut, is diving into the AI world to enhance efficiency and profitability. The company is leveraging AI technology to optimize everything from supply chain processes to in-store operations. As a result, customers can expect faster service and more personalized experiences. This tech rollout represents a significant move towards incorporating cutting-edge technology into everyday business operations.

Hangzhou, the picturesque capital of Zhejiang Province, is quickly emerging as a key pillar in China’s artificial intelligence (AI) revolution. Once known primarily for its cultural heritage and as the headquarters of e-commerce giant Alibaba, the city is now transforming into a powerful AI hub, driven by visionary government policies, a dynamic startup ecosystem, cutting-edge academic institutions, and high levels of private and public investment. Its rapid evolution exemplifies China’s broader strategy to lead the global race in artificial intelligence.

Government Initiatives and Strategic Policy Support

A major driver behind Hangzhou’s AI rise is the strong backing of the Chinese government, both at national and provincial levels. The “Hangzhou AI Industry Chain High-Quality Development Action Plan” has set bold objectives: certifying more than 2,000 new high-tech enterprises, launching over 300 large-scale technological projects, and injecting an impressive 300 billion RMB (approx. US$40 billion) into innovation annually. This funding supports AI research, development of cutting-edge applications, infrastructure, and talent cultivation.

Further cementing Hangzhou’s AI ambitions is the revitalization of “Project Eagle,” a policy initiative that allocates 15% of industrial development funds to future industries, with AI being a priority. These initiatives are not only helping to establish Hangzhou as a hub of AI innovation but are also attracting domestic and international investors eager to tap into this growth.

The Rise of the “Six Little Dragons”

One of the most notable signs of Hangzhou’s AI success story is the emergence of six pioneering startups, collectively referred to as the “Six Little Dragons.” These companies represent the city’s growing diversity and sophistication in AI application:

DeepSeek – Known for its work in natural language processing and large language models.

Game Science – A game development firm leveraging AI in next-gen interactive experiences.

Unitree Robotics – Specializes in agile AI-powered robots for various industrial and consumer applications.

DEEP Robotics – Develops quadruped robots capable of complex navigation and movement, often used for security and research.

BrainCo – Focuses on brain-computer interface (BCI) technologies that merge neuroscience and machine learning.

Manycore Tech – A hardware and software AI solutions provider with strengths in chip design and high-performance computing.

These companies are not only rapidly scaling within China but are also attracting international attention for their technological advancements and commercialization potential. Their presence underscores Hangzhou’s strength in fostering both technical excellence and business scalability.

Academic Foundations and Skilled Talent Pipeline

Hangzhou’s AI ecosystem is further bolstered by a solid academic foundation. Zhejiang University, one of China’s top-tier institutions, plays a critical role in producing AI talent and thought leadership. The university houses cutting-edge research labs and has established partnerships with top tech firms for collaborative innovation.

Graduates from Zhejiang University and other local institutions often go on to found startups or take leadership roles in the AI industry. The close connection between academia and industry ensures a continuous exchange of ideas, innovation, and expertise, which is essential for sustained growth in emerging technologies like AI.

In addition, Hangzhou has invested in AI-focused education and vocational training programs to ensure that its workforce remains competitive. This comprehensive talent strategy allows the city to meet the growing demand for data scientists, machine learning engineers, and AI researchers.

Industry Collaboration and Corporate Investments

Beyond startups and academia, major corporate players are betting big on Hangzhou’s AI future. Most notably, Alibaba, headquartered in the city, has been at the forefront of this transformation. Under the leadership of Eddie Wu, the company has pledged to deepen its involvement in generative AI and has launched internal initiatives aimed at developing new AI products and services.

In parallel, Alibaba has worked to attract foreign capital to Hangzhou’s AI sector, especially in connection with the Six Little Dragons. Following Jack Ma’s involvement in a high-level business symposium with President Xi Jinping, Alibaba’s influence in shaping Hangzhou’s AI roadmap has only increased.

Other corporations and venture capital firms are also taking notice. Investment funds are flowing into AI development zones, incubators, and innovation labs across Hangzhou, helping to establish a robust support system for tech entrepreneurship and research.

Infrastructure, Challenges, and Long-Term Outlook

Despite these promising developments, Hangzhou faces several challenges that come with rapid growth. Talent retention remains a concern, as other Chinese cities like Beijing and Shenzhen compete for the same AI professionals. Furthermore, as AI technology demands powerful computing infrastructure, continued upgrades in data centers, power grids, and 5G connectivity are essential.

Additionally, navigating regulatory uncertainty and ensuring responsible AI development will be key for Hangzhou to maintain sustainable growth. The city must also remain agile in adapting to global shifts, including trade policies, technology standards, and geopolitical tensions that may impact international partnerships and supply chains.

Nonetheless, the city’s proactive governance, talent pool, and innovative momentum offer strong indicators that Hangzhou is well-positioned to become a global AI innovation hub. As China continues to push its national AI ambitions, Hangzhou stands out as a leading example of how a regional city can emerge as a technological powerhouse through visionary planning, strong public-private partnerships, and relentless innovation.

The technology of artificial intelligence is advancing rapidly, prompting the need for continuous improvements in innovative techniques in order to address challenges and seize strategic opportunities in the field, experts said at a recent scientific conference.

“Over the past seven to eight years, AI, particularly exemplified by large language models, has been developed very fast, with ChatGPT achieving 100 million monthly active users just two months after its launch, and DeepSeek reaching 100 million users within two weeks of its launch,” said Dai Qionghai, chairman of the Chinese Association for Artificial Intelligence and an academician of the Chinese Academy of Engineering.

Dai made the remarks in Beijing on Sunday in a keynote speech at the 27th annual meeting of the China Association for Science and Technology.

As a crucial strategic technology and resource, AI is now shifting from horizontal to vertical development, with a focus on advancing more mature technologies to bolster China”s competitive edge in the global technological landscape, said Dai, who is also dean of Tsinghua University’s School of Information Science and Technology.

He dismissed concerns about AI replacing human tasks, noting that current large language models cannot autonomously make decisions, but rely heavily on human input.

Furthermore, due to the complexity and nonlinearity of deep learning models, it is challenging to explain their internal working mechanism, Dai said.

“AI starts from perception of the environment and then uses algorithms to take actions,” he said, adding that sensors are important mediators that transform information from the physical world to the digital one, serving as the foundation of AI. He noted that embodied robots and autonomous driving both rely on vision as well as light detection and ranging technologies, which measure movement and precise distances in real time, for implementation.

At the conference, Dai showed a video of a humanoid robot flexibly performing a somersault and climbing mountains, but failing to put objects on tables when obstacles were in the way. He said that a primary driver of AI, computer vision, is inspired by the feline visual system rather than the human one, so that while it can cope with tasks like positioning and identification, it struggles to address intricate problems and match human-level comprehension.

“The advancement of neuroscience heavily relies on the development of microscopic imaging technologies,” he said, adding that experts at home and abroad are working on this to delve into neural and brain mechanisms, aiming to achieve digital representations that will facilitate a new frontier in AI.

Yu Shaohua, deputy chairman of the China Institute of Communications, said that the increasingly complex and expanding AI system has increased the demand for computing operations, which is straining the capabilities of electrical power capacity. He emphasized the potential of optics to substitute for electricity.

Wang Xiaoyun, an academician of the Chinese Academy of Sciences, stressed that cryptography can help safeguard the privacy of data and information in AI.

In addition, provable security mechanisms can be used to combat deepfake technology — a type of AI that is used to create convincing fake images, videos and audio recordings — and to determine the authenticity of images, videos and other media, she said.