Hangzhou is doubling down on tech – minus the viral hype

In contrast to the previous year's viral technology craze in Hangzhou, the city's latest tech investments have largely gone unnoticed. The "New Eight Steeds," eight deep-tech companies spanning smart glasses, inference GPUs, compute-in-memory chips, and space computing, differ significantly from the previous "Six Little Dragons."

The former focus on serving businesses and institutions, making them harder to market to the public. This has led to skepticism about whether Hangzhou's technology marketing approach has become ineffective. The financial market's reaction to these companies' struggles, such as Unitree's market value plummeting and Manycore Tech's share price falling, further complicates the narrative.

However, the comparison with the previous group is not entirely fair, as the products of the "dragons" were more suited to social media, featuring visually appealing robots and AI-generated films. The new companies, on the other hand, sell infrastructure, which is challenging to explain through short videos. Nonetheless, Hangzhou is strategically pivoting towards becoming China's leading city for AI innovation during the 15th five-year plan period.

To achieve this, the city is establishing institutions to support deep-tech investment, offering long-term capital through a "3 plus N" industrial fund cluster. The success of this strategy depends on patient capital and actual industrial results, as chipmakers typically require several years to achieve yield consistency and win customer validation.

Hangzhou must also compete with other cities like Beijing, Shenzhen, and Shanghai, which have varying advantages in AI research, supply chain depth, and industrial base. Alibaba, a major player in Hangzhou's tech scene, is targeting 20 gigawatts of global data center capacity by 2032 and plans to roll out its Zhenwu V900 chip in mass production by early 2027.

For Hangzhou's chip and computing companies, Alibaba presents both opportunities and competition, requiring them to find niches within or alongside Alibaba's expanding AI infrastructure.