A robot demonstrates its Chinese chess-playing skills at the Shanghai World Expo Exhibition & Convention Center in Shanghai on Wednesday. [Photo/China Daily]

To beef up the application in transportation, Shanghai opened up 560 kilometers of roads to conduct autonomous driving tests in 2020. It issued 155 licenses to 23 companies eligible for such tests, with both figures topping the national numbers, the Shanghai Municipal Commission of Economy and Informatization said.

Other promising undertakings include a brain-computer interface technology that can allow minimally invasive implantations without the need for a craniotomy at the Shanghai Institute of Microsystem and Information Technology.

"The approach is critical to solving major brain diseases like Amyotrophic Lateral Sclerosis, and has shown good performance in the level and safety of device implantation," said Tao Hu, vice-dean of the institute.

Shanghai's bid to excel in AI sprouted in 2017 when the municipal government first released a document to bolster the development of the "next generation AI industry". By 2020, local authorities counted 1,149 firms as "key AI enterprises", whose scale reached 224.6 billion yuan.

The city has fostered a cluster of industrial zones located in Pudong new area and Xuhui district. This has attracted big tech firms like Amazon, Microsoft, Tencent and Huawei to dive into AI-related businesses.

Emerging players also said they benefited from the city's comprehensive industrial chain, rich application scenarios and innovative policies.

"Thanks to innovative policies, we managed to secure leading banks as our very first batch of customers, allowing us to massively adopt machine learning to the financial sector," said Zhu Mingjie, founder and CEO of CraiditX, an AI startup specialized in finance. During the WAIC 2021, the company is debuting a virtual digital agent it claims can raise efficiency in the insurance sector.