Youth Entrepreneurs at the Heart of Shanghai's AI Boom

Xu Licheng spent years studying the predictable reactions of chemicals. That changed when he saw AlphaGo, an AI system, defeat a human world champion in 2016. The moment stunned him. He realized the future was not in test tubes, but in algorithms.

Xu, now a scientist at the Shanghai Academy of AI for Science, founded a company to help chemists use AI via natural language rather than code.

"We want to let scientists focus on science, not programming," said Xu.

He is part of a massive shift at the Shanghai Foundation Model Innovation Center in Xuhui District, a national leader for artificial intelligence development.

The average age of founders at the center is 28. They gather regularly to exchange ideas and share resources. The young teams are turning Shanghai into a global AI hub.

The incubator attracted more than 100 new artificial intelligence companies over the past year and helped build a regional cluster of 900 large model enterprises.

"Artificial intelligence is the era's greatest gift to young people, because it lowers the cost of trial and error for innovators," said Zhou Xiaorong, executive editor of MiniMax.

Chinese President Xi Jinping visited the center a year ago and urged Shanghai to explore new frontiers in technology and governance.

The Ministry of Industry and Information Technology recently named the center the country's first national excellence incubator dedicated to generative artificial intelligence.

Young developers form the backbone of the growing ecosystem.

Wang Dianyi, 24, is a doctoral student at the Shanghai Innovation Institute. He gathered a team of 10 other students and launched a self-developed multimodal generation model called DeepGen1.0 in February. The lightweight model will eventually expand into video generation and interactive content.

"We want to build an intelligent system with stronger reality understanding and reasoning capabilities," said Wang.

Wen Deliang launched Red Bear AI two years ago. His company posted 250 million yuan (US$36.6 million) in contract value last year.

The number of enterprise clients in the first quarter of this year already matched the total for all of last year.

Wen faced early setbacks. He led his team in investing 30 million yuan in large-model distillation technology without success. The failure taught him that models struggle with long-term context retention.

By including a memory layer in the foundation model, he was able to resolve the issue. The new product can replace human labor in 70 percent of targeted tasks and boasts an accuracy rate of 98.4 percent. The company updates its product every week.

"We are probably the first artificial intelligence company in the world to think of adding a memory layer to large models," said Wen.

The innovation center provides essential resources to help these startups survive and grow. Management offers computing power, financial connections, and assistance with algorithm registration.

The space of the center has expanded by nearly 20,000 square meters over the last year. It now spans more than 50,000 square meters. Management hosted more than 300 industry events last year, drawing 100,000 participants.

MiniMax serves as a prime example of the center's rapid incubation. The company completed its initial public offering on the Hong Kong Stock Exchange in January.

It set a global record for the shortest time from founding to an initial public offering for an artificial intelligence firm.

Engineers leverage existing tools to accomplish tasks that previously required massive teams. "This efficiency allows small startups to compete globally," said the executive editor, Zhou.

"Artificial intelligence is gradually filling the resource gap between tech giants and startup companies," said Zhou.

Infinigence AI focuses on building artificial intelligence infrastructure. The company reduced inference costs significantly over the past year to help other developers.

"Our platform's token calling volume doubles every two weeks, and it has grown by nearly 20 times so far," said Zeng Shulin, general manager of Infinigence AI.

Shanghai recorded a 39.5 percent increase in its artificial intelligence industry scale last year. The sector reached a total value of 637 billion yuan.

Local authorities helped register 157 large models citywide. The innovation center accounted for over 60 percent of those approved models.

Management plans to introduce more social elements to the workspace to foster collaboration. A new facility featuring coffee shops and evening bars will open in June.

"We want to create a third space that integrates scientific and technological social activities with daily life," said Yang Jingjing, chairwoman of Shanghai Large Model Ecosystem Development Co.