Visitors play a racing game during the ChinaJoy 2026 expo in Shanghai on July 31. XU PEIQIN/FOR CHINA DAILY

The effective application of artificial intelligence technologies and further global business expansion are seen as the key drivers shaping the future of China's gaming industry, business leaders and developers said at the 23rd China Digital Entertainment Expo and Conference (ChinaJoy), which took place from July 31 to Aug 3 in Shanghai.

The rapid development of AI technologies — such as large language models, multimodal models and AI agents — is fundamentally restructuring the entire game development and operations process. Targeting specifically the gaming industry, the AI gaming cloud has been booming over the past few years.

According to a recent research report by United States-based market consultancy IDC, the AI gaming cloud basically refers to the AI technologies, products and services used by game developers throughout the production process, from game design and prototyping to game development and testing, as well as game publishing and operations.

The report showed that China's AI gaming cloud market reached 1.86 billion yuan ($275 million) last year. The sector is expected to maintain a compound annual growth rate of about 91.6 percent over the next five years, hitting 11 billion yuan by 2029 and contributing more than half of the overall gaming cloud market.