China now has some 4,040 AI companies, according to a whitepaper released by the Beijing Municipal Commission of Economy and Information Technology at this weekend’s 22nd China International Software EXPO in Beijing.

Beijing Artificial Intelligence Industry Development surveyed AI businesses nationwide and determined that Beijing is home to 1070, or 26 percent of the national total. Moreover, Beijing-based AI enterprises accounted for 35 percent of AI companies that have obtained venture capital.

More than half the Beijing AI enterprises are at the startup phase of their financing, with 57 percent yet to receive Series A funding. The paper identifies Haidian District, where 61 percent of Beijing AI enterprises are registered, as home to the capital’s AI industry. Since AI boomed in Beijing in 2015–16, Haidian subdistrict Zhongguancun has become an AI innovation centre for tech firms and is now home to half of Chinese magazine CIWEEK’s Top 100 AI Companies.

The white paper’s industry segmentation chapter identifies five leading AI application sectors in Beijing: Biotech/Healthcare, Smart Home, Smart Retail, Autonomous Driving, and Future Cities. The Beijing Tiantan Hospital and Peking Union Medical College Hospital lead in biotech/healthcare, while Xiaomi’s Mi AI speaker and JD.com’s Dingdong Play are popular smart home products from Beijing brands. Beijing enterprises such as JD.com, Meituan.com, and Bianlifeng.com have also entered the smart retail field. Beijing has issued standards for autonomous vehicle testing on public roads, and will benefit from national smart city investments expected to surpass US$134 billion in 2020.

The whitepaper lists five competitive advantages for Beijing: related policies, talents capital, innovation and entrepreneurship capacity, software R&D, and patent protection. It notes however that the city also faces four challenges: weak initiate innovation, lack of chips/sensors/critical components, lack of high-end talents, and cost disadvantage/regional competition.

The white paper’s suggested development plans for the Beijing AI industry include promoting industrial upgrading, developing core technologies, creating an ecosystem for fostering, training and attracting talents, and more.

Beijing Artificial Intelligence Industry Development is the result of comprehensive research and analysis involving data from open sources and investment organizations such as Zero2IPO Group, WIND, itjuzi.com, Blue Wave Capital, etc.