Hangzhou, the capital of Zhejiang Province, has emerged as a powerhouse for high-speed technology innovation in China. Home to over 12 million people, the city sits in the heart of the Yangtze River Delta, one of China’s most dynamic economic regions, just an hour from Shanghai by high-speed train. Often likened to a Chinese Silicon Valley, Hangzhou blends creativity with practicality, offering a less commercialized yet highly conducive environment for tech ventures.
Once recognized globally as the birthplace of Alibaba, Hangzhou has since evolved far beyond a single identity. It now ranks as China’s best-performing large city, propelled by indicators like wage growth, property transactions, and the private sector’s share of GDP. More recently, the city has woven artificial intelligence into its core, establishing itself as a major AI cluster by 2024. With over 500 AI firms generating more than 70% of Zhejiang’s AI-sector profits, Hangzhou’s ecosystem is both robust and highly specialized.
At the heart of this surge are the so-called “Six Little Dragons,” a group of fast-moving tech startups spanning AI, robotics, gaming, spatial intelligence, and brain-computer technology—all rooted in Hangzhou.
Manycore specializes in spatial intelligence software, converting real-world spatial data into immersive digital environments. In early 2025, it became the first of the Dragons to file for a Hong Kong IPO. Starting with GPU-driven computing for simple tasks, Manycore quickly advanced to photorealistic rendering, becoming a key player in China’s visualization and AI industry.
DeepSeek made headlines in 2025 with its open-source reasoning model, DeepSeek-R1. Offering performance comparable to leading AI systems but at a fraction of the cost—$294,000 to train—its app reached 16 million downloads in just 18 days, overtaking the launch numbers of ChatGPT. DeepSeek exemplifies efficiency and innovation, symbolizing the “underdog” spirit that defines the Little Dragons.
Unitree captured global attention with its humanoid robots performing at China’s Spring Festival Gala. The company is preparing for an IPO potentially valuing it at $7 billion. Its G1 humanoid robot, lauded for its affordability, is among the most widely deployed humanoid robots worldwide, highlighting robotics as a central pillar in China’s AI strategy.
DEEP Robotics, founded shortly after Unitree, focused on industrial robots for factory inspections and hazardous environments, showcasing a practical application of AI and robotics in manufacturing.
Game Science, the studio behind Black Myth: Wukong, has sold over 25 million copies as of early 2025, making it one of the fastest-selling video games ever and cementing Hangzhou’s reputation in the gaming sector.
BrainCo, the only Little Dragon with overseas origins, was founded by Han Bicheng during his Ph.D. at Harvard University. Relocating its headquarters to Hangzhou in 2018, the company reached a reported pre-IPO valuation of $1.3 billion in 2025, bridging neuroscience and AI technology.
Hangzhou’s rise is rooted not just in capital but in talent cultivation. Zhejiang University, ranked among China’s top four universities, has produced many of the city’s tech leaders, including DeepSeek’s CEO Liang Wenfeng. Its robust programs in computer science, AI, and robotics make it a breeding ground for innovation. The city has also eased hukou restrictions and housing policies, attracting talent from larger Chinese cities and even abroad. Affordability adds to its appeal: software engineers earning 20,000–40,000 yuan find a comfortable lifestyle in Hangzhou, with rents approximately 20% lower than in Beijing.
Startups benefit from targeted incentives, including subsidies of up to 600,000 yuan for high-tech ventures and interest-free loans for university students. By 2025, the city had committed over 100 billion yuan ($14 billion) to expand the AI sector and support more than 700 key firms, alongside 400 billion yuan ($56 billion) in broader tech investment planned by 2030.
Hangzhou’s approach to governance is light-handed yet strategic, providing startups the freedom to innovate while selectively nurturing initiatives that show promise. Its suburban Liangzhu district, known as a “coders’ village,” fosters a collaborative ecosystem, connecting e-commerce, AI, and robotics within a tight, efficient geographic cluster.
Currently, Hangzhou hosts 774 startups and 11 unicorns, representing 8% of China’s startup landscape. The city has demonstrated an ability to punch above its weight, leveraging talent, affordability, and agile policy to create a thriving tech ecosystem. Yet competition is intensifying, both within China—with other AI initiatives from Alibaba, Binance, and TikTok—and globally, particularly against U.S. tech models.
Hangzhou’s Six Little Dragons illustrate the city’s capacity to innovate at scale. While success is never guaranteed, the combination of infrastructure, policy, and talent positions Hangzhou as a key player in China’s quest to challenge the global tech frontier.
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