China’s AI industry is shifting focus toward deploying AI agents, with the China Telecom Research Institute projecting that inference will dominate 80% of the nation's computing market by 2029.

Key Points

• China Telecom Research Institute reports a strategic pivot from model training to AI agent deployment to drive computing demand.
• Chinese technology companies are projected to invest approximately 600 billion yuan, or $89 billion, into AI infrastructure this year.
• The European Commission is seeking bids for seven AI gigafactories with a 30 billion euro budget, though only 1 billion euros is currently secured.
• European gigafactory bids close on November 12, with operational status targeted for mid-2028 to compete with global inference demand.
• Interest in the European project has declined, with the number of expected bidders dropping from 70 to roughly ten companies.

Why it Matters

The shift toward inference highlights a transition where AI becomes an ongoing operational expense rather than a one-time capital investment. This divergence in strategy and funding speed between China and Europe could significantly impact which regions capture the long-term economic margins of the AI agent economy.