China has released a new three-year action plan to support small and medium-sized enterprises (SMEs) in the AI sector from 2026 to 2028 by boosting innovation and entrepreneurship, as part of its drive to strengthen AI development.

The plan, released by the Ministry of Industry and Information Technology on September 4, is designed to create a more dynamic and diverse business environment.

According to the plan, by 2028, China aims to foster a large number of innovative and high-potential AI startups in key areas, such as industry applications, data services and intelligent computing.

Targets include cultivating more than 10,000 technology- and innovation-focused SMEs, increasing the number of specialized "little giant" firms — a national designation for innovative niche-market leaders — that use advanced technology to over 2,000, and encouraging the emergence of a significant number of fast-growing "gazelle" companies and billion-dollar "unicorns" enterprises.

A gazelle enterprise is an SME with strong innovation capabilities, operating in emerging or specialized fields and with strong growth potential, that has entered a period of rapid growth driven by technological or business model innovation. A unicorn enterprise is a privately held startup company with a valuation of over one billion USD.

On the infrastructure side, the plan sets out goals to build high-standard technology business incubators for AI, national public service demonstration platforms for SMEs, and new national SME clusters with distinctive features in the AI field, with 10 of each. The overall vision is to sustain strong entrepreneurial and innovative activity among AI-focused SMEs, with a landscape for AI-enabled high-quality development of SMEs beginning to take shape.

To achieve these goals, 15 specific measures have been outlined under four broad tasks — resources, entrepreneurship, open source and services. These include strengthening the supply of startup resources such as accessible computing power, high-quality data and real-world application scenarios; supporting new types of entrepreneurs, including sole proprietorships and independent developers who use AI tools flexibly; expanding open-source ecosystems to encourage collaboration; and improving startup services through better incubation and public platforms.

Key actions under the plan include a special program to provide accessible AI computing power to SMEs, as well as building high-quality industry datasets in fields like smart manufacturing, materials research and biomedicine, and making them available to AI startups in a phased, well-regulated manner.

Local governments are encouraged to support micro-entrepreneurs and very small teams that use AI tools for agile development, and to set up AI-focused incubators, workspaces where startups can combine AI models with industry data, and public service demonstration platforms.

The plan also calls for strengthening national open-source AI communities, such as AtomGit, a code-hosting platform under the OpenAtom Foundation, to help developers share code and resources more effectively.