News Analysis
Chinese authorities have launched a sweeping probe into domestic artificial intelligence (AI) companies, escalating scrutiny beyond routine oversight and, in some cases, preventing key executives from leaving the country, according to industry insiders and other sources familiar with the matter.
The campaign signals Beijing’s intensifying effort to assert control over AI technology, data, and talent amid accelerating global competition in the sector.
Several industry sources told The Epoch Times that regulators are not only examining overseas financing and partnerships, but also scrutinizing research plans—moves that reflect growing concern within the Chinese Communist Party (CCP) about sensitive technologies or expertise flowing abroad.
They said the pressure has gone well beyond regulatory compliance, and in some cases, executives have effectively become technical hostages, barred from traveling overseas while authorities review their companies’ operations and future direction.
Those interviewed requested anonymity or used only their surnames, citing fear of reprisal.
An industry source in China recently told The Epoch Times that large-scale compliance inspections and security assessments began after the revised Cybersecurity Law took effect on Jan. 1.
The goal, the source said, is to bring large-model AI development under what officials describe as a national security governance framework, tightening control over both core technologies and data flows.
A Chinese AI researcher surnamed Luo said authorities have been gathering detailed information directly from companies. He said the head of an AI firm was recently asked to submit development plans and projections.
“Authorities are conducting surveys of AI companies in the form of questionnaires,” Luo told The Epoch Times. “On the surface, it’s about ‘understanding development directions,’ but in reality, they want to know whether companies intend to cooperate with foreign firms or are receiving foreign funding.”
He added that most AI companies are likely to face similar inquiries.
Another AI researcher based in Zhejiang, surnamed Yu, said that while China has made advances in AI and robotics applications in recent years, it still relies heavily on overseas sources for foundational technologies.
“Concerned about core achievements being transferred abroad, authorities are tightening controls on technology outflows,” Yu told the publication, adding that the current campaign resembles more than a standard review.
In his view, it functions as a “political early warning system” to flag companies seen as potential risks.
“As long as a company seeks to integrate with the global tech ecosystem, it could be labeled a potential ‘defector’ and placed under close surveillance,” he said.
‘National Security’ and Pressure on Global Expansion
An industry insider surnamed Yang said authorities are framing the campaign as support for business while simultaneously collecting sensitive information.
“Under the pretense of ‘supporting enterprise development,’ officials are probing into cross-border cooperation details everywhere,” Yang told The Epoch Times.
“For companies that have already gone global, authorities invoke ‘national security’ to pressure them, demanding they not share any core code with foreign partners, effectively pushing them to abandon international markets and rely instead on state-backed funding.”
An expert familiar with Chinese cybersecurity policies, identified as Xiong, said the CCP’s approach has shifted in a key way.
“Compared to previous years, the focus is no longer just on where a company is registered, but on absolute control over technology, data, and decision-making,” he told The Epoch Times.
Xiong said he has heard that key personnel at AI companies must now seek approval from local authorities before traveling abroad.
“If the government believes core capabilities might slip beyond its control, it will move to restrict you,” he said. “I’ve also heard that the government provides symbolic funding while embedding personnel to supervise these companies.”
Recent Case
Recent developments have drawn particular attention. A China-based network engineer surnamed Yuan told The Epoch Times that authorities have increasingly been targeting AI companies with strong growth potential.
He pointed to a high-profile case first reported by the Financial Times that unfolded between late 2025 and March 2026, when Chinese regulators intervened in the acquisition of Manus—a Singapore-based AI agent startup founded in China—by U.S. tech giant Meta Platforms, in a deal valued at about $2 billion.
Manus CEO Xiao Hong and Chief Scientist Ji Yichao were summoned to Beijing in March for questioning by the National Development and Reform Commission and were subsequently barred from leaving mainland China pending the regulatory review—effectively held as “technical hostages,” Yuan said.
He said Chinese authorities scrutinized whether the deal violated rules on technology transfers and outbound foreign investment, using regulatory review to disrupt what would otherwise have been a routine cross-border acquisition.
“They seem to be checking whether companies plan to relocate overseas—to places like Singapore or Malaysia—and whether they’ve received foreign funding,” Yuan said.
He added that some companies had already considered moving their headquarters abroad to avoid regulatory pressure.
As AI continues to spread across industries, Yuan said Chinese authorities are increasingly treating domestically developed technologies as strategic assets that must “serve national development.” Some executives, he added, have been summoned and urged to demonstrate “patriotism” and “bring honor to the country.”
Yue Li contributed to this report.
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