AI reshapes competitive landscape within the software sector

According to China Economic Net - Economic Daily, 14 October 2026, the Ministry of Industry and Information Technology has released industry data. China’s software business revenue exceeded RMB 10 trillion in the first eight months of the year, rising by 8.8% year on year. Total profit maintained steady growth, while exports of software services recorded relatively rapid expansion.

Artificial intelligence is reshaping the software industry at an unprecedented pace. The Ministry of Industry and Information Technology has issued the Implementation Plan for the “AI plus Software” Special Action. The plan sets targets for 2028: marked improvement in the intelligence level of the software and information technology services industry, rollout of applications covering 20,000 large-scale software enterprises, delivery of 100 intelligent technical renovation projects for software firms, creation of 100 benchmark agent software applications across key sectors, and incubation of more than five high-quality open-source projects.

China’s software industry benefits from large scale, abundant application scenarios and active open-source communities. In the first eight months of this year, software business revenue reached RMB 10,282 billion. The sector’s total profit hit RMB 1,183.7 billion, up 1.3% year on year. Software service exports stood at USD 4.599 billion, a 12.5% year-on-year increase. In 2025, total industry revenue was RMB 15.48 trillion, 6.2 times the value recorded in 2012, with a compound annual growth rate of 15.1%.

Domestic operating systems, databases and other foundational software have achieved rapid technical improvements. Industrial software now offers product portfolios covering major industries. Chinese open-source ecosystems built around domestic large models are expanding their influence, alongside continuous emergence of new formats and models for software and information services. As of June 2026, the daily token call volume nationwide exceeded 500 trillion tokens.

Artificial intelligence restructures software production workflows, product forms and service models. Intelligent programming tools run through the full development lifecycle, covering requirement analysis, code generation, testing and maintenance, lifting development efficiency and lowering technical barriers. Software evolves from instruction-executing tools to intelligent entities that interpret user intent and complete tasks independently. New service models emerge, shifting software delivery from product sales to capability provision.

The Implementation Plan sets out six areas of work: advancing transformation in software production, accelerating intelligent upgrading of software products, fostering new agent software formats, expanding intelligent software services, strengthening foundations for intelligent software development and optimising the industrial operating environment.

Tongrentang Technology deployed the Inspur Haiyue Mano enterprise intelligent execution system across four core scenarios, namely intelligent Q&A, intelligent data query, intelligent financial reporting and mobile intelligent applications. Drawing on multi-agent collaboration, natural language interaction and automated data analysis, the system generates complete analysis dashboards within 30 seconds. The rejection rate for expense claims has fallen by 60%, and knowledge retrieval efficiency has risen by over 80%.

Agent software is an emerging software format developed alongside advances in artificial intelligence, with capabilities for autonomous perception, memory, decision-making, interaction and execution. Relevant proposals cover the creation of agent software application stores and skill package resource libraries, alongside standardised review and operational management for listed applications. Innovation participants are encouraged to develop high-quality professional skill packages and knowledge bases. Software developers may build function components designed for agents and accumulate sector-specific knowledge. Open-source zones for agents will be nurtured to build an open ecosystem for multi-party collaboration and skill sharing.

Intelligent software services shift value delivery from product sales to continuous operational services. New commercial models including Model-as-a-Service and Agent-as-a-Service gain wider adoption. The China Software Industry Association notes that the Implementation Plan includes systematic arrangements to expand intelligent software services, focusing on three strands: innovating service models, expanding service providers and accelerating real-world deployment.

The Ministry of Industry and Information Technology will carry out tiered cultivation for digital and intelligent transformation service providers in manufacturing, guiding software businesses to transform into AI application service providers. An entrepreneurship support scheme for small and medium-sized AI enterprises will back lightweight, specialised new software service operators, fostering start-ups and specialised and sophisticated “little giant” firms. Local authorities with suitable conditions may build innovation clusters for “AI plus Software”, supplying sites, computing power and other supporting resources.

China has made notable progress in underlying core capabilities and performance of foundational and industrial software in recent years, though bottlenecks remain in core technologies and original innovation capacity requires reinforcement. Artificial intelligence restructures software technical architectures and development workflows to help address these gaps.

Two integration routes exist for AI and industrial software. The first is AI augmentation, adding intelligent functions onto existing architectures; this approach is widely deployed and delivers quick operational gains. The second is AI-native design, where models undertake core software functions and extend capability boundaries.

The Implementation Plan includes tasks to lift the intelligence of foundational software and drive intelligent transformation in industrial software. Work for foundational software centres on intelligent upgrading and hardware-software coordination. For industrial software, development focuses on scenario-driven progress, knowledge reuse and platform integration.

The ministry will back joint research between foundational software developers and hardware manufacturers, including chip and server producers, for underlying adaptation and hardware-software optimisation. More than 15 adaptation centres will be constructed to boost industrial verification capacity and build a new integrated hardware and software intelligent software technology system, leveraging artificial intelligence to improve the ecosystem for foundational software.

Computing power, high-quality datasets and standards are identified as core supports for the “AI plus Software” initiative. Work streams include strengthening computing service provision, developing high-quality datasets and formulating key industry standards. Policy instruments such as computing vouchers will reduce computing costs for software enterprises, with matching services and cloud and computing guidance for small and medium-sized operators to secure universal access to computing resources.