Commentary: For China’s Local Governments, AI Won’t Replace Real Estate

Global tech giants are expanding artificial intelligence capital expenditures.

In China, local governments are trying to capitalize on this, viewing AI infrastructure as a replacement for the deflated real estate sector. They are deploying subsidies and special bonds to build intelligent computing centers.

But this investment-growth-fiscal loop is a mirage. AI and real estate differ fundamentally in job creation, consumption drivers and financial sustainability.