2025.02.18

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Introduction: Why did other cities in China not give birth to it, and what makes Hangzhou capable of nurturing world-leading artificial intelligence enterprises? The soil that allows everyone to fully utilize their talents is more important than top-tier talent itself.

Chinese artificial intelligence companies are driving industry transformation. The rise of these companies has drawn attention to the city of Hangzhou. In recent years, Hangzhou has seen a surge in tech-savvy enterprises, with companies like Unitree Robotics and Game Science, the creators of "Black Myth: Wukong," frequently becoming "traffic hotspots." In this context, the emergence of such companies is no coincidence. Why haven't these companies emerged in other Chinese cities? What makes Hangzhou capable of nurturing world-class artificial intelligence enterprises?

With talent, everything is possible.

The founder, Liang Wenfeng, is not a native of Hangzhou. Liang Wenfeng was born in Zhanjiang, Guangdong, and after graduating from high school, he was admitted to Zhejiang University to study Electronic Information Engineering. He also obtained a master's degree in Information and Communication Engineering from Zhejiang University. His time at Zhejiang University laid the foundation for his academic capabilities. As a key strategic scientific and technological force of the nation and a core engine for regional innovation and development, Zhejiang University has supplied many talents to the technology enterprises in Hangzhou.

The business community collectively refers to Qunhe Technology, Unitree Technology, Game Science, BrainCo, and CloudMinds as the "Six Little Dragons of Hangzhou." Among their founders, except for Liang Wenfeng, who graduated from Zhejiang University, Zhu Qiuguo, the founder of CloudMinds, spent his undergraduate to doctoral studies at Zhejiang University. Huang Xiaohuang, the founder of Qunhe Technology, graduated from the Chu Kochen Honors College of Zhejiang University for his undergraduate studies and then went to the United States to study computer science. Wang Xingxing, the founder of Unitree Technology, completed his undergraduate studies at Zhejiang Sci-Tech University and his master's degree at Shanghai University. Among the founders of the Six Little Dragons of Hangzhou, four have educational experiences in Zhejiang.

Industry insiders told the First Financial Reporter that Wang Xingxing, the founder of Unitree Technology, initially struggled to find a job after graduation. He eventually secured a position at DJI and moved to Shenzhen, but ultimately chose to return to Hangzhou to start his own business. One reason is that he is a native of Zhejiang, and another is that the cost of starting a business in Hangzhou is relatively lower compared to other major cities. "It was quite natural for him to choose Hangzhou," said the insider, "Hangzhou has a unique competitiveness in attracting talent and nurturing innovative enterprises."

A researcher who previously worked in Hangzhou told the First Financial reporter: "In recent years, Hangzhou has made considerable efforts in attracting talent. Its success is partly due to the momentum of the internet era and partly inseparable from the talent reserves of top universities like Zhejiang University." The density of AI-related talent in Hangzhou is now comparable to that of first-tier cities. In terms of talent resources, according to the "AI Top Talent Data Atlas" released by the Maimai Talent Think Tank, Beijing accounts for % of the nation's talent, ranking first, while Hangzhou ranks second with .%, and Shenzhen only accounts for .%.

Talent is the foundation of all technology-driven endeavors. Only when the density of talent is sufficient can breakthroughs be possible, whether it's in hardware development like Yushu Technology or in software algorithm development. Lin Xiaoyong, an entrepreneur in the artificial intelligence medical field who has been based in Shenzhen for over a decade, has a deep understanding of this. His company needs to recruit talent in the laser field. In Hangzhou, he can easily hire professionals from local universities like Zhejiang University or Hangzhou Dianzi University, but in Shenzhen, he cannot find talent from universities of the same caliber. "In the past, there weren't many companies in Hangzhou in cutting-edge technology fields, but there are many universities, so the supply of research talent is greater than or roughly equal to the demand, making talent resources abundant. However, in Shenzhen, the supply is far less than the demand for talent," said Lin Xiaoyong. Shenzhen companies have traditionally been primarily involved in commercial real estate or manufacturing, and top-tier universities are few and far between. "Building a cutting-edge technology R&D team is a long-term accumulation process; it's not something that can be achieved by spending a lot of money in just a few years. The R&D talents in our team are all in other cities; there are almost none in Shenzhen."

It basically grows on its own.

The soil that allows everyone to fully utilize their talents is more important than top-tier talent. Alibaba is another enterprise from Hangzhou that has gained global influence, and it did so many years earlier. When Jack Ma founded Alibaba, most of the core team members were not from the best universities in Zhejiang. However, this Hangzhou-based company attracted Joseph Tsai, a Yale graduate who was then a leader at an investment institution. Now, Joseph Tsai is the chairman of Alibaba.

On a certain date, Joe Tsai recalled the reasons for joining Alibaba at a conference. More than twenty years ago, when he visited Jack Ma's apartment, he noticed more than a dozen pairs of shoes at the door and a toothbrush in the bathroom. He realized that the team was working around the clock there, and this entrepreneurial atmosphere, akin to a "Chinese version of a garage," deeply moved him. Years later, Alibaba raised funds from international markets, securing investments from Japan's SoftBank and America's Yahoo. Its e-commerce business not only catered to Chinese consumers but also helped Chinese companies sell their products globally. Based in Hangzhou, with financing and markets facing the world, Alibaba has become a global enterprise.

Alibaba has also cultivated a large number of talents in Hangzhou, inspiring numerous entrepreneurs. However, the funds for its growth period did not rely on local governments but were raised from the international market. The funds were self-raised and did not come from government funds. Today, to a certain extent, it is also a global enterprise. Its large model is open-source and freely available for global developers to use. American companies such as Amazon and Microsoft have integrated the large model into their ecosystems.

Joy, a Hangzhou-based entrepreneur who graduated from the Computer Science Department of Zhejiang University and has studied at the Lakeside University, told the First Financial reporter: "In the past, Hangzhou was dominated by Alibaba. This success essentially reflects the power of marketization. This company earns its own money and develops general artificial intelligence on its own. Marketization allows the underlying innovative capabilities to be better utilized." A Hangzhou tech company told the First Financial that Hangzhou has always been a place with a high degree of marketization, "These companies in Hangzhou have basically grown on their own."

In a certain month and year, the "Zhejiang Economic Information" sponsored by the Zhejiang Provincial Department of Economy and Information Technology disclosed that it had identified a number of artificial intelligence application scenarios, leading application enterprises, AI service providers, and "Smart Quality Products" for the year in Zhejiang Province. However, it was not included in these enterprises. The market will achieve a free combination of capital and talent, leading to unexpected interactions among market enterprises. Alibaba and a recent company have shown linkage. After becoming popular, it has driven a significant rise in the stock prices of Hong Kong-listed companies led by Alibaba and Xiaomi. Since a certain month this year, the stock prices of these two companies have increased by more than % over the past month, with Alibaba's current stock price reaching a new high since a certain month and year.

Cultivate free-growing soil

After gaining global popularity, a wave of reflection has emerged in various places: Why did it appear in Hangzhou and not in their own cities? Joy told the First Financial reporter that cities like Shanghai, Beijing, and Shenzhen, as China's centers for technological innovation, have also nurtured numerous high-tech enterprises. However, Hangzhou has seen rapid development in the fields of internet and artificial intelligence in recent years. Apart from its talent resources, this is closely related to its favorable entrepreneurial environment and policy support.

At last year's Hangzhou Digital Trade Fair, a reporter from Yicai had in-depth exchanges with local tech innovation companies and relevant policy-making department officials. The most significant impression they left on the reporter was their "pragmatism." In Hangzhou, "transforming data elements into productive forces" is not just a slogan but is implemented in specific application scenarios. "The fact that such companies have not appeared in Shenzhen, I believe, is also related to the city's cultural DNA. Although Shenzhen has many innovative companies, it lacks the gene of 'entering through the narrow gate and walking the long road.' The atmosphere in Shenzhen is about 'making quick money,'" Lin Xiaoyong told the Yicai reporter.

"Each city has its own unique industrial advantages and innovative environment, and the rise of Hangzhou is a reflection of this diverse innovative setting," said Joy. "Shenzhen also has its strengths, Shanghai has its stations and Xiaohongshu, and Hangzhou happens to be at a peak of technological enterprise emergence at this stage." Cities like Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou have different population structures and industrial foundations, as well as varying land constraints and levels of openness to the outside world. This results in different industrial development landscapes in each city, attracting and nurturing different companies.

Just as there is only one Silicon Valley in the United States, where tech giants like NVIDIA and Google have their headquarters in California, it does not prevent Amazon from being rooted in Seattle, while Microsoft's headquarters is in Washington State. In China, Hangzhou does not have miHoYo but has Alibaba, Beijing does not have Xiaohongshu but has Xiaomi, Shanghai did not give birth to Alibaba but has Pinduoduo, and Shenzhen did not attract Tesla but has nurtured Tencent and Huawei. These companies all value talent, as do the local governments.

On [date], at the 2023 Suzhou "AI+" Innovation Development Promotion Conference, the "Several Measures of Suzhou to Support Talent Development in the AI Field" was significantly released. These measures focus on talent introduction, cultivation, evaluation, motivation, and services, integrating targeted initiatives. Shenzhen is promoting the upgrade of the "+" industrial cluster from strategic emerging industries to future industries. Industry insiders believe that this transformation requires the support of disruptive innovation more than ever, which not only requires capital investment but also, crucially, talent resources. Whether a company is based in Shanghai or Hangzhou does not hinder its ability to attract global talent. Although headquartered in Hangzhou, Liang Wenfeng has also recruited graduates from top Chinese universities such as Tsinghua and Peking University, and has established an office in Beijing. While Tencent's headquarters are in Shenzhen, its esports industry headquarters are in Shanghai, as Shanghai is committed to building itself into a global esports capital.