Introduction:
China's State Council officially promulgated the "Opinions on Deepening the Implementation of the 'AI Plus' Action" (State Document [2025] No. 11) on August 26, 2025. This policy aims to drive deep integration of artificial intelligence technology across all sectors of the economy and society, outlining the path and timeline for the intelligent economy over the next decade. Key goals include achieving extensive AI integration in six key areas by 2027, with over 70% penetration of new-generation intelligent terminals and agents; exceeding 90% penetration by 2030, making the intelligent economy a crucial growth engine; and fundamentally forming the development pattern of an intelligent economy and society by 2035.
The document emphasizes advancing the "AI Plus" action in six key domains: Science & Technology, Industrial Development, Consumption Upgrade, Public Livelihood, Governance Capacity, and Global Cooperation. It relies on eight foundational pillars: Model Capabilities, Data Innovation, Computing Power Coordination, Application Environment, Open-Source Ecosystem, Talent Development, Policies & Regulations, and Security Safeguards.
Facing this national strategy, how should electronic cigarette enterprises transform? Should they continue leveraging AI within the vaping industry, or use the AI momentum to pivot to other sectors? This is a strategic dilemma common in strongly regulated industries: Deepen the core business using AI, or migrate existing capabilities to new industries riding the AI wave?
Table of Contents
The Big Picture: Reading China's AI Strategy
Strategic Paths for Vape Companies
- Path A: Deepen the Core Vape Business with AI
Path B: Pivot to New Sectors Using AI Capabilities\
1. The Big Picture: Reading China's AI Strategy
- National Intent (H3): The underlying message is to promote AI as new foundational infrastructure, necessitating that all industries undergo a transformative "AI-powered upgrade."
- Real-World Focus (H3): Policy encouragement will prioritize AI application in the six key areas mentioned (Manufacturing/Industry, Consumption, Livelihood, Governance, Tech, Global Cooperation).
- Vape Industry's Position (H3): As a special category industry, the vaping sector is unlikely to receive explicit policy encouragement. However, its dual nature as both a manufacturing and consumer goods industry cannot be ignored.
In essence: If you operate in vaping → AI can help improve efficiency, reduce risks, and enhance compliance. But within the national strategic narrative, vaping will not be a "key supported industry" for AI application.
2. Strategic Paths for Vape Companies
Path A: Deepen the Core Vape Business with AI
Logic: The global vaping market remains substantial, though complex regarding compliance and distribution.
AI Application Areas:
- Smart Manufacturing: AI-powered quality inspection, flexible production lines, building "smart factories."
- Smart Products: Developing intelligent devices with sensors for "usage frequency monitoring, health prompts."
- Smart Compliance: Using AI and big data for distribution channel monitoring, public sentiment analysis, and regulatory policy forecasting.
- Advantages: Leverages existing expertise, allows for first-mover advantage in (zhìnéng huà - intelligentization) within the sector, enhancing competitiveness.
- Risks: Remains subject to regulatory constraints; even successful AI implementation could be hampered by tighter policies.
Path B: Pivot to New Sectors Using AI Capabilities
Logic: If the vaping industry's policy future seems limited, leverage existing manufacturing, consumer ops, and supply chain experience to migrate "AI transformation capabilities" to sectors with stronger policy support.
Potential Pivot Areas (AI-aligned):
- Smart Consumer Goods (smart home devices, health wearables, AI-driven lifestyle products).
- Trendy Toys/Cultural IP × AI (integrating smart interactive features, emotion recognition, AI companionship into toys/collectibles).
- AI Health Products (pivot from the "consumption + health" adjacent nature of vaping to AI health management, smart personal devices, AI-driven electronic atomization+ for other uses).
- Advantages: Aligns with policy incentives, potentially easier access to funding, larger strategic narrative potential.
- Risks: Requires stepping away from core industry strengths, involves entering highly competitive new markets, necessitates building distribution and brand from scratch.
3. Strategic Recommendations for Vape Enterprises
Consider a dual-track strategy instead of an either/or approach: Core Business AI Upgrade + New Sector Exploration.
- Core Vaping Business (H3): Do not abandon it. Use AI to enhance efficiency, product quality, and compliance, maintaining cash flow and market position. Aim to build an "AI Smart Manufacturing Benchmark Facility" or a "Intelligent Compliance System," becoming a leader in (zhìnéng huà - intelligentization) within the industry.
- New Venture Exploration (H3): Use the AI wave as an opportunity to enter a "policy-friendly, capital-rich" new smart consumer sector (e.g., smart trendy toys, AI health devices, AI+ atomization tech). Leverage the design, manufacturing, and supply chain capabilities accumulated from the vaping industry as your entry point.
This approach provides two safeguards:
- If vaping regulations stabilize or improve → Your AI investments give you a leading advantage.
- If policies tighten further → You already have a developing AI-powered product line in a new sector, enabling a smoother pivot.
4. Conclusion: AI as Your Dual Advantage
The future for vape enterprises isn't about whether to adopt AI, but how AI can help fortify your core business and unlock new opportunities.
AI will not only create differentiation within the vaping industry but also serve as your ticket to entering new, high-growth markets aligned with China's national strategic direction.
Call to Action: Is your vape business ready for the AI+ era? Reevaluate your strategy today to balance innovation, compliance, and future growth.