Published on Jan. 15, 2026

For a sky full of drones, AI will be needed for air traffic control. Experts in China describe the task as building the "traffic lights in the sky".

While China’s low-altitude economy is about to take off, there is an urgent need for unmanned traffic management (UTM), local experts say.

AI is needed to guarantee the flight safety of the millions of freight and passenger drones that are expected to be operating in the skies over China sooner or later.

“Without AI, there is no intelligent, connected sky, and without AI, embodied flying vehicles cannot be truly intelligent,”, said Zhang Ju'en, honorary vice chairman of the Chinese Society of Aeronautics and Astronautics (CSAA), at a recent discussion forum about the topic “AI + low-altitude economy” in Hangzhou.

"Driven by AI, the low-altitude economy will usher in a new phase,” he said. A broad consensus about this has already emerged in China.

What is being debated at the moment is how exactly AI should be employed to manage drone traffic. It is not only being debated, though. The first pilot systems are being developed.

The city of Shenzhen and several companies, including DJI and Huawei, have jointly developed systems that can “coordinate fleets of thousands of drones in real time, process more than 100,000 data points per second, and achieve centimeter-level obstacle avoidance and dynamic route planning", the newspaper Pengpai Xinwen (The Paper) reported on December 29, 2025. (in Chinese) .

This is an example of what happens when technological leadership in artificial intelligence (Huawei is developing both AI models and AI chips), drones (DJI is the world’s biggest manufacturer) and forward-looking, holistic system planning meet.

The government of Shenzhen had been one of the first local governments in China introducing dedicated legislation for the AI industry when it released the “Measures for Building Shenzhen into a Pioneering City for Artificial Intelligence”.

In the Longgang district of Shenzhen, officials are now partnering with the company Amap, to build a "spatiotemporal digital base with AI driving daily full-domain data updates and integrating more than ten categories of data, including communications, navigation, surveillance and meteorology", reported the business daily Diyi Caijing.

The company, also known as Gaode Map, provides its self-developed AI models “Yunjing” and “Yunrui” as the “brain” of this pilot project.

"Yunjing uses computer vision technologies to reconstruct and dynamically perceive the physical world in real time, while Yunrui applies spatial-intelligence algorithms to analyse complex environmental information", wrote Diyi Caijing.

The goal is to “dynamically optimise flight routes, using airspace grid computing and millisecond-level safety alerts, supporting tens of thousands of flights per day”, the paper explained.

Both artificial intelligence and the low-altitude economy have been declared a strategic focus for China's economy by the central government in the next Five-Year Plan, which will be officially adopted
at the upcoming National People’s Congress in Beijing.

Now it is becoming clear that these two future technologies need to converge before the vision of air taxis can be realised over China’s densely populated cities. Local governments, such as the one in Shenzhen, are competing to leverage high-level industrial policies like the “AI+” initiative announced by the central planners in Beijing to develop their local economy.

Both state-owned and private companies in China are currently developing eVTOL (electric Vertical Take-Off and Landing) aircraft. EHang, XPeng, AeroHT and others are competing for airworthiness approvals.

The nascent low-altitude economy, roughly defined as manned or unmanned aircraft flying below about 1,000 metres, is attracting huge investment while many observers expect that it will take off soon.

China now has "around 1,400 complete low-altitude equipment manufacturers, nearly 30 tonne-class drones under development and close to 70 types of eVTOL,” the news agency Xinhua Caijing reported recently.

There are two major bottlenecks for further development of this potential "trillion-yuan industry" at the moment, however. One is the range that electric batteries can provide at the moment, mostly limited to fight times of around two hours.

The second bottleneck is the still missing physical infrastructure for take-offs and landings, and crucially a unified structure for a safe management of this newly developed low-altitude airspace.

At a forum called "AI-Empowered Development of the Low-Altitude Economy", Tsinghua University's Department of Industrial Engineering recently brought together entrepreneurs, academics and officials to discuss the challenge of air traffic management not covered by the current civil aviation system.

Speaking at this forum in Hangzhou, Wu Xuemin, Chairman of Beidou Fuxi Information Technology Co., proposed the establishment of a “nationally unified spatiotemporal standard”.

With the help of AI and China's Beidou satellite network, a "three-dimensional traffic-light system for low-altitude transportation" can be built, he suggested.

Other experts pointed out that AI should not be seen as a mere auxiliary tool or add-on for the low-altitude economy but should be developed as the “operating system” for the future of mobility in China.

"As the number of drones in the sky continues to grow, effective unmanned traffic management (UTM) becomes a critical challenge", the financial daily 21jingji quoted Professor Li Lishuai from the City University of Hong Kong from the same conference.

“This ranges from long-term planning of air-route networks, to the detailed design of individual routes, and real-time updates in response to dynamic order demand. All of these complex decisions rely heavily on the support of AI algorithms", Li said.

While the discussion on how best to regulate the new airspace is progressing, companies are positioning themselves as service providers. There was no coincidence in Tsinghua University hosting this forum in Hangzhou.

The city on the shores of the beautiful West Lake, not far from Shanghai, where the cloud-provider Alibaba, DeepSeek and hundreds of other software companies have their headquarters, is a hotbed of software development.

While Shenzhen hopes to leverage its huge hardware manufacturing industry to gain a foothold in the commercialisation of drone traffic, Hangzhou is betting on its AI developers.

At the "Global Digital Trade Expo" in Hangzhou last September, the company Genenkosy Intelligent Security Technology (Hangzhou) Co. unveiled what it called "China's first vertical domain foundation model for low-altitude security".

"Leveraging AI deep learning, it can analyse drone dynamics in real time, predict flight trajectories, and identify all anomalous behaviors across hundreds of thousands of flight data records per day", reported Xinhua Caijing about the new AI model.

Start-ups with good ideas in these areas have access to a lot of capital in China. The state-owned "Hangzhou Industrial Investment Group" has used a low-altitude industry fund as a catalyst” to attract individual and strategic investors.

The fund itself has a volume of three billion Yuan (approximately US$430 million), but should attract a multiple of that from private sources of capital.

So far, 200 projects have been financed in four focus areas: low-altitude intelligent manufacturing, low-altitude vision, low-altitude logistics, and low-altitude data.

“As state-owned capital, we must have the patience to accompany industrial growth,” Xinhua Caijing quoted a spokesman for the fund. "Rather than pursuing short-term profits, the group follows a logic of “infrastructure empowering scenarios and scenarios feeding back into industry,” continuously pushing the low-altitude economy from an “early-stage phase” toward a “trillion-yuan ecosystem.”

“Patience” and the long-term support of government-led efforts to develop a future industry are not what one would usually expect from investors. In China, however, this is the way it is.

Among the 200 projects supported so far are companies like Volant Aerotech and Drone Yee (Zhuoyi Intelligent). It is not only eVTOL developers with flashy prototypes that can count on ample start-up financing in China.

Rather, public and private investors are currently building a whole industrial structure, a completely new ecosystem of “aircraft platform leadership with coordinated component suppliers”, as the report put it.

This is why nobody is seriously doubting that the low-altitude economy will soon enter a phase of fast development in China, which now looks likely to be accelerated further with the help of AI.

According to a forecast by the Civil Aviation Administration of China (CAAC), China’s low-altitude economy is expected to reach a market size of RMB 1.5 trillion by 2025 and rise to RMB 3.5 trillion by 2035, which amounts to approximately US$215 billion to US$500 billion.