China's startup landscape is being reshaped by a fast-growing class of businesses powered not by teams, but by individuals armed with artificial intelligence.

Known as "one-person companies", or OPCs, these ventures are emerging as a defining feature of the country's digital economy, prompting local governments to rethink how entrepreneurship is supported and scaled.

The numbers underscore the shift. As of mid-2025, China had more than 16 million one-person limited liability companies, said a report by the Zhongguancun Talent Association.

In the first half alone, 2.86 million new OPCs were registered, up 47 percent year-on-year and accounting for nearly a quarter of all new businesses. The surge reflects how AI tools — from code generators to content engines — are dramatically lowering the cost of starting and running a company.

Hangzhou, Zhejiang province, is positioning itself at the forefront of the trend. The eastern tech hub recently moved to formalize the model, with Shangcheng district unveiling one of the country's first policy frameworks aimed specifically at OPC development.

The district's new measures, released in early March, lay out a blueprint for building AI-focused OPC communities, offering everything from subsidized office space to computing resources and funding support.

Hangzhou's push reflects broader ambitions to cement its status as a national center for AI innovation. As the core district of the provincial capital, Shangcheng has been cultivating what they describe as a "tropical rain forest" innovation ecosystem — a dense network of startups, capital and infrastructure designed to accelerate emerging industries.

"We will allocate no less than 100 million yuan ($14.65 million) annually to support OPCs in growing from creative individuals into 'one-person unicorns'," said Chen Gang, a senior official in the district's technology, economic and information bureau.

The policy framework is structured around the full life cycle of OPC development.

Early-stage founders will gain access to move-in-ready workspaces, streamlined administrative services and living support.

As ventures scale, the focus shifts to mentoring, resource matching and scenario-based testing opportunities. More mature companies will be guided toward financing channels and integration into industrial supply chains.

Infrastructure is a central pillar of the plan. Shangcheng will provide more than 20,000 square meters of low-cost office space near key hubs, with subsidized workstations available for up to three years. The district is also building a unified AI services platform, bundling models, computing power and development tools into a membership system.

Financial backing is being scaled up in parallel. A dedicated OPC fund with a target size of 1 billion yuan will focus on early-stage and hard-tech projects, while urban scenarios — spanning consumption, tourism and public services — will serve as testing grounds for new applications. The district is also introducing a talent evaluation system that will annually identify top OPC founders and award up to 200,000 yuan in incentives.

By 2026, Shangcheng aims to establish 10 OPC communities, incubate 100 AI enterprises and attract 1,000 founders.

The local push mirrors similar efforts elsewhere in China. In Beijing, Zhongguancun-based initiatives are exploring "AI OPC-friendly communities" by integrating resources from universities and alumni networks. Shenzhen, Guangdong province, has set targets to build more than 10 OPC communities by 2027, each designed to create concentrated clusters of AI-driven startups.

Industry participants said the model is already reshaping how companies scale.

At Honghub, a Hangzhou-based OPC community, more than 1,300 projects have applied since its launch in late 2025, with a select group of startups now operating within the network. Some have expanded from single founders to teams of dozens, while others generate tens of millions of yuan in revenue with just a handful of employees.

Even so, structural challenges remain. The country's financial and regulatory systems are still geared toward traditional enterprises, leaving OPCs with limited access to tailored credit evaluation and financing channels.

Asset-light founders often struggle to secure loans without collateral, while the model itself raises questions about how companies sustain growth and retain talent as they expand.

Despite these hurdles, policymakers and investors are betting that OPCs will become a core component of the AI economy.