As per MRFR analysis, the China AI in IoT Market Size was estimated at 1.02 (USD Billion) in 2023.The China AI in IoT Market is expected to grow from 1.3(USD Billion) in 2024 to 22.81 (USD Billion) by 2035. The China AI in IoT Market CAGR (growth rate) is expected to be around 29.719% during the forecast period (2025 - 2035)
Key China AI in IoT Market Trends Highlighted
Thanks to encouraging government regulations and technical breakthroughs, the China AI in IoT market is seeing notable industry trends. The Chinese government places a strong emphasis on innovation and has published strategic plans encouraging the integration of AI and IoT in a range of businesses.
By improving operational efficiency and data-driven decision-making, this is creating a climate that is favorable for businesses to invest in AI-driven IoT solutions.Rapid urbanization and rising demand for smart city initiatives—which combine AI and IoT to enhance infrastructure and public services—are major market drivers. AI-powered smart gadgets have become increasingly popular in both the consumer and business sectors in recent years.
AI in IoT is being used more and more by industries including manufacturing, transportation, and healthcare to streamline operations and enhance service quality. Businesses in China are compelled to embrace AI and IoT to improve connection and user experience due to the country's rapidly increasing internet penetration and mobile device usage.
The expanding field of edge computing, which improves data processing power and lowers latency in Internet of Things applications, offers opportunities to be investigated. Businesses can concentrate on creating cutting-edge solutions that meet regional market demands, like environmental sustainability and energy efficiency.
Additionally, research and development can be accelerated via partnerships between academic institutions and tech companies, resulting in more specialized AI in IoT applications designed for the Chinese market. All things considered, China's emphasis on becoming a worldwide leader in AI technology offers a wealth of potential prospects in the AI in IoT market.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
China AI in IoT Market Drivers
Government Initiatives and Support for AI Development
The Chinese government has made significant commitments to develop artificial intelligence within various sectors, including the Internet of Things (IoT). A report from the Ministry of Industry and Information Technology of China highlights that by 2030, China's AI industry is expected to be valued at approximately USD 1 trillion.
This provides a solid foundation for the China AI in IoT Market, further driven by investments in Research and Development from both the public and private sectors.For instance, companies like Baidu and Alibaba have increased their investments in AI technology, with Baidu allocating USD 15 billion to AI projects over the next three years and Alibaba investing in smart city initiatives that leverage IoT and AI. These government and corporate initiatives foster a favorable environment for innovative IoT solutions utilizing AI, stimulating growth in this sector.
Growing Demand for Smart Home Devices
The rising interest in smart home devices in China is acting as a major driver for the China AI in IoT Market. According to research from the China Internet Network Information Center, the number of smart home device users in China reached 300 million in 2021, with expectations to grow further as urbanization increases.
Major tech companies like Xiaomi and Huawei are responding to this trend by expanding their smart home product lines, integrating advanced AI capabilities for enhanced user experience. This growing market segment not only increases consumer interest but also promotes AI technology adoption within the IoT landscape, further enhancing market growth.
Expansion of 5G Infrastructure
The rollout of 5G technology across China significantly enhances the potential of the China AI in IoT Market. The Ministry of Industry and Information Technology announced plans to build over 600,000 5G base stations by 2025, which will considerably improve connectivity, speed, and response times for IoT applications.Companies such as China Mobile and China Telecom are leading this initiative, with investments exceeding USD 50 billion for infrastructure development.
The implementation of 5G not only promotes seamless communication between devices but also supports real-time data processing capabilities through AI, creating rich opportunities for innovations across various sectors such as healthcare, agriculture, and smart cities.
AI in IoT Market Component Insights
The Component segment of the China AI in IoT Market has emerged as a crucial area with significant potential for growth, driven by the increasing integration of artificial intelligence in various Internet of Things applications.As China continues to advance its technological capabilities, the demand for innovative platforms that enable seamless connectivity and data processing has become paramount. Platforms, acting as the backbone of AI in IoT, facilitate communication among devices and ensure efficient data management.
Software solutions are equally vital as they offer specialized applications designed to analyze the vast amounts of data generated, thus delivering valuable insights that can drive decision-making processes across industries.Moreover, services related to AI integration, maintenance, and support are essential for ensuring the optimal performance of these technologies, creating a need for skilled professionals and strategic partnerships.
The emphasis on smart cities, manufacturing automation, and industrial Internet applications within China propels the importance of these components even further. As industries increasingly rely on connected devices for real-time data collection and analysis, the efficiency brought by advanced software solutions cannot be understated, fostering improved operational capabilities and cost reductions.
Furthermore, the ongoing initiatives by the Chinese government to boost technological advancements and promote digital transformation in key sectors provide a robust environment for the growth of these components.The dominance of cloud-based platforms signifies a shift in how IoT solutions are deployed, ensuring scalability and flexibility for businesses of all sizes. This transition supports the growing trend of data-driven decision-making as enterprises capitalize on real-time analytics to enhance customer experiences.
Additionally, as businesses prioritize cybersecurity measures to protect sensitive data, the demand for comprehensive services outweighs conventional approaches, creating opportunities for service providers to deliver innovative solutions that address these challenges.Exploration into emerging sectors, such as healthcare, transportation, and energy, further highlights the significance of the Component segment within the China AI in IoT Market.
With particular focus on connected healthcare devices and smart grid technologies, the collaborative nature of platforms and software solutions positions them as integral to the successful integration of AI, empowering industries to harness the full potential of the Internet of Things.As China strives towards becoming a global leader in technological innovation, the Component segment is set to play a pivotal role in achieving these objectives and shaping the future landscape of the AI in IoT Market.
Overall, the growing interdependence of platforms, software solutions, and services emphasizes the need for continuous innovation and adaptation within this space to meet evolving market demands. With numerous opportunities for investment and development, stakeholders are encouraged to stay ahead of market trends and refine their strategies in response to the dynamic nature of the industry.The significance of the Component segment within the larger framework of the China AI in IoT Market cannot be overstated, as it serves not only as a foundation for current advancements but also a catalyst for future growth and transformation across various sectors.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
AI in IoT Market Technologies Insights
The Technologies segment of the China AI in IoT Market plays a pivotal role in shaping the future of various industries, leveraging advanced capabilities to enhance efficiency and decision-making processes. Machine Learning and Deep Learning represent significant components of this segment, driving innovations that optimize data processing and automate complex tasks.
These technologies are essential in developing smart applications, enabling devices to learn from user behavior and adapt accordingly, which further enhances user experience. Natural Language Processing (NLP), another crucial area, facilitates seamless human-machine interactions and communication, allowing for the extraction of valuable insights from unstructured data.
This fosters improved customer service and engagement across sectors such as finance, healthcare, and retail. As China's commitment to becoming a global AI leader continues to grow, these technologies not only boost operational efficiencies but also contribute to market competitiveness, creating a robust ecosystem for innovation in the AI in IoT landscape.The collective advancement in these areas underscores an opportunity for enterprises to harness AI capabilities effectively, ensuring sustained growth and improved market dynamics as the country advances towards smart city initiatives and an intelligent economy.
AI in IoT Market Vertical Insights
The China AI in IoT Market, particularly within the Vertical segment, is showcasing significant growth as industries increasingly adopt smart technologies to enhance operational efficiency. Manufacturing stands out as a key area, where AI-driven IoT solutions improve automation and predictive maintenance, tapping into China’s robust industrial base.
In the Energy and Utilities sector, integrating AI with IoT enables optimized energy management and resource allocation, essential for meeting the nation's energy demands. The Transportation and Mobility sector leverages AI to enhance logistics, traffic management, and autonomous vehicle technologies, reflecting China's commitment to modernizing its infrastructure.
Moreover, the BFSI sector utilizes AI in IoT for improved fraud detection and customer engagement, signaling a shift towards digitization in financial services. Government and Defense are incorporating AI to support surveillance and national security, emphasizing the strategic importance of technological advancements.
Retail benefits from AI-enabled IoT through personalized shopping experiences and efficient inventory management, aligning with the rise of e-commerce in China. The Healthcare and Life Sciences domain relies on AI for remote patient monitoring and personalized medicine, driving innovation in patient care.
Telecom is essential in facilitating connectivity among other sectors through data transmission, ensuring seamless integration of AI solutions. Overall, the China AI in IoT Market segmentation reveals robust opportunities across these verticals, underscoring the country's rapid technological advancement and the growing recognition of AI's role in various industries.
China AI in IoT Market Key Players and Competitive Insights
The China AI in IoT market has become one of the most dynamic and competitive landscapes in recent years, driven by rapid technological advancements and a growing demand for intelligent connectivity across various sectors. Companies are increasingly investing in artificial intelligence to enhance the functionality of IoT devices, leading to improved efficiency and a stronger consumer experience.The competition is marked by innovations in machine learning, data analytics, and smart device integration, which are all fundamental to the evolution of smart cities, home automation, and industrial applications.
This increasing interconnectedness has resulted in a rich ecosystem of players, with both established tech giants and emerging startups vying for market share and technological leadership, fostering an environment ripe for collaboration, partnerships, and competitive strategies.
Kuaishou Technology stands out in the China AI in IoT market due to its unique approach to content-sharing and social networking. The company's strengths lie in its ability to integrate advanced AI algorithms into its platform, optimizing user experiences by targeting content to the right audience and creating more engaging interactions.
Kuaishou's extensive reach within the Chinese market, particularly among younger demographics, provides a robust user base that facilitates the gathering of valuable data, which in turn enhances its AI capabilities.
The company's focus on localized content and innovative features, such as augmented reality filters and advanced video personalization, positions Kuaishou Technology favorably within the competitive landscape, allowing it to capitalize on the growing demand for smart connectivity in daily life.Haier has established itself as a formidable player in the China AI in IoT market by offering a diverse range of smart home appliances and solutions that leverage artificial intelligence for enhanced usability and efficiency.
The company is known for its innovative products, including smart refrigerators, washing machines, and air conditioning units that can be controlled remotely via IoT technology. Haier's strengths include a strong brand reputation, a commitment to R&D, and extensive distribution networks across China, which enable it to maintain a significant market presence.The company's strategic mergers and acquisitions have further bolstered its capabilities, allowing it to integrate cutting-edge IoT technologies into its product lines.
Additionally, Haier’s investments in AI-driven smart home ecosystems position it favorably to meet the evolving needs of consumers who seek convenience and connectivity in their household devices, solidifying its standing in the competitive landscape of China's AI in IoT market.
Key Companies in the China AI in IoT Market Include
China AI in IoTMarket Developments
Kuaishou introduced Kling AI 2.0, a sophisticated video generating model, in April 2025. The model represented a major breakthrough in AI-driven video production, outperforming OpenAI's Sora in domains like semantic responsiveness and visual quality.Kuaishou released Kling AI 2.1 in May 2025, increasing video resolution to 1080p. The goal of this improvement was to more successfully compete with international AI video platforms.With the use of AI-powered technologies, Kuaishou's Q2 revenue climbed 13.1% year over year to RMB 35 billion in July 2025, resulting in a record 16% profit margin.Revenue from overseas increased by 32.7%.
AI-powered Haier's COSMOPlat platform dramatically decreased manufacturing failures and downtime in March 2025, improving global competitiveness.At the Shanghai Ecosystem Conference in March 2025, Haier presented their AI-powered smart home strategy, which included the Sanyiniao platform, which now has over 10 million users.
A significant advancement in AI integration for household appliances was made in July 2024 when Haier's HomeGPT was granted the China Academy of Information and Communications Technology's highest Level 4 certification.The generative AI segment of SenseTime reported a 72.7% growth in revenue to 1.82 billion yuan in August 2025, accounting for 77% of overall sales.
Xiaomi released MiDashengLM-7B, an open-source AI speech model, in August 2025 with the goal of improving electric cars and smart homes.ZTE demonstrated AI-native intelligent networks, applications in fields including healthcare and education, and advancements in green technologies at MWC Shanghai in June 2025.
China AI in IoT Market Segmentation Insights
AI in IoT Market Component Outlook
AI in IoT Market Technologies Outlook
AI in IoT Market Vertical Outlook
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 1.02(USD Billion) |
| MARKET SIZE 2024 | 1.3(USD Billion) |
| MARKET SIZE 2035 | 22.81(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 29.719% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | Kuaishou Technology, Haier, SenseTime, Nuomi, Alibaba Group, Sogou, Xiaomi, ZTE Corporation, Huawei Technologies, Tencent Holdings, iFLYTEK, Megvii Technology, Pinduoduo, Baidu, JD.com |
| SEGMENTS COVERED | Component, Technologies, Vertical |
| KEY MARKET OPPORTUNITIES | Smart city development projects, Industrial automation enhancements, Healthcare IoT integration, Agriculture precision management, Energy consumption optimization |
| KEY MARKET DYNAMICS | Rapid urbanization and smart cities, Increasing government support and funding, Growing demand for automation, Advancements in machine learning technologies, Expansion of 5G connectivity |
| COUNTRIES COVERED | China |
Frequently Asked Questions (FAQ):
The projected market size of the China AI in IoT Market in 2024 is expected to be 1.3 billion USD.
By 2035, the China AI in IoT Market is expected to reach a size of 22.81 billion USD.
The expected compound annual growth rate for the China AI in IoT Market is 29.719 percent from 2025 to 2035.
Key players in the China AI in IoT Market include Kuaishou Technology, Haier, SenseTime, and Alibaba Group among others.
The market value of platforms within the China AI in IoT Market is projected to be 0.45 billion USD in 2024.
The expected market value of software solutions in the China AI in IoT Market is projected to be 6.49 billion USD by 2035.
Services are expected to represent a market value of 8.91 billion USD in the China AI in IoT Market by 2035.
Significant growth opportunities in the China AI in IoT Market stem from the increasing adoption of AI technologies across various sectors.
The China AI in IoT Market currently faces challenges such as regulatory hurdles and integration complexities with existing systems.
Major applications of AI in the IoT context within China include smart home devices, industrial automation, and healthcare technology.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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