China’s policies and investments in metaverse and AI development: implications for academic research

4.1 Key policy documents and development plans

The Chinese government’s commitment to advancing AI and metaverse technologies is evidenced by a series of comprehensive policy documents and development plans. These initiatives reflect China’s strategic vision for technological leadership and economic transformation in the digital age. The cornerstone of China’s AI strategy is the “New Generation Artificial Intelligence Development Plan,” unveiled by the State Council in 2017. This ambitious document delineates a three-step approach to establishing China as a global AI leader by 2030, emphasizing AI’s role in enhancing national competitiveness and outlining specific measures to promote research, development, and application across various economic sectors (State Council of China 2017). China’s approach to the metaverse is embedded within broader digital economy initiatives. The “14th Five-Year Plan for the Development of the Digital Economy,” released in 2021, includes provisions for virtual reality (VR) and augmented reality (AR) technologies, setting targets for the digital economy’s contribution to GDP and outlining strategies for digital transformation across industries (National Development and Reform Commission 2021).

Our analysis reveals that local governments have taken significant initiative in fostering metaverse development. A prime example is the “Shanghai Action Plan for Cultivating the Metaverse Industry (2022–2025)” which aims to establish a substantial metaverse industry cluster in the city by 2025, focusing on key technologies, industry applications, and ecosystem development (Shanghai Municipal Government 2022). Supporting these strategies, the National Natural Science Foundation of China (NSFC) has established specific funding programs for AI and metaverse research (NSFC 2022). Similarly, the Ministry of Education launched the “AI Innovation Action Plan for Institutions of Higher Education” to enhance AI education and research in universities (Ministry of Education 2018). A comprehensive report by Zhiyan Zhan, published in June 2024, provides detailed insights into China’s metaverse industry structure and potential. Titled “China Metaverse Industry Development Prospect Forecast and Investment Strategy Planning Analysis Report,” it conceptualizes the metaverse as a technologically crafted virtual world enabling deep interactions with reality (Zhiyan Zhan 2024).

The report’s analysis reveals the sophisticated structure of China’s metaverse industry, encompassing upstream, midstream, and downstream segments, with a focus on infrastructure development, interactive experiences, and various application scenarios. The industry is further classified into distinct layers including experience, discovery, creator economy, spatial computing, decentralization, human-computer interaction, and infrastructure, highlighting the ecosystem’s complexity and interconnectedness. Our examination of these policy documents indicates that China’s approach to AI and the metaverse reflects a comprehensive vision for technological leadership, addressing various aspects of the industry chain and providing supportive policies at national and local levels. This strategy emphasizes both technological development and integration into broader economic and social systems.

4.2 Strategic goals of the Chinese government

The Chinese government’s strategic objectives for the development of the metaverse are intricately linked with several national-level strategies, reflecting a comprehensive approach to technological advancement and socioeconomic development. Our analysis reveals that these objectives are not isolated initiatives but are integrated into broader national goals, as evidenced by various policy documents and research reports. A primary strategic objective identified through our research is the integration of metaverse technologies with the national strategy of revitalizing China through science and technology. This approach is evident in the “New Generation Artificial Intelligence Development Plan” (State Council of China 2017), which emphasizes the importance of emerging technologies in enhancing national competitiveness. The metaverse, as a frontier technology, is viewed as a catalyst for innovation in areas such as artificial intelligence, virtual reality, and blockchain, all of which are crucial for China’s technological advancement.

Another significant strategic objective uncovered in our analysis is the alignment of metaverse development with China’s carbon neutrality goals. The “14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035” (National People’s Congress 2021) emphasizes the importance of green and low-carbon development. Our research indicates that the metaverse, being primarily a digital realm, is viewed as a potential contributor to reducing carbon emissions by facilitating virtual interactions and reducing the need for physical travel and resource consumption. The Chinese government also sees the metaverse as a crucial component of its digital economy strategy. The “14th Five-Year Plan for the Development of the Digital Economy” (State Council of China 2022) outlines the government’s intention to foster new business models and digital industries. Through our analysis of policy implementation, we found that the metaverse is expected to play a significant role in this digital transformation, potentially creating new economic opportunities and driving innovation across various sectors.

Cultural digitization emerges as another strategic objective associated with metaverse development in China. The “Outline of the National Cultural Digitization Strategy” (Ministry of Culture and Tourism 2022) emphasizes the importance of preserving and promoting Chinese culture through digital means. Our research reveals that the metaverse is increasingly seen as a platform for cultural heritage preservation, digital art creation, and cultural exchange, aligning with China’s goal of enhancing its soft power and cultural influence globally. Our analysis also identified the metaverse as a tool for rural revitalization, in line with China’s strategy to bridge the urban-rural divide. The “Digital Village Development Action Plan (2022–2025)” (Ministry of Agriculture and Rural Affairs 2022) outlines plans to leverage digital technologies, including metaverse applications, to modernize agriculture, promote rural tourism, and enhance rural education and healthcare services.

Furthermore, our research indicates that the Chinese government views the metaverse as a means to promote common prosperity, a key national policy goal. This objective is reflected in various policy documents that emphasize the need for inclusive growth and equitable distribution of the benefits of technological advancement. The metaverse is expected to create new employment opportunities and democratize access to various services, potentially contributing to more balanced economic development.

4.3 Comparison with the policies of other leading countries

The global landscape of metaverse and artificial intelligence development is characterized by diverse approaches, reflecting different national priorities, regulatory philosophies, and technological capabilities. Our comparative analysis reveals distinct patterns in how major nations approach these emerging fields. The United States has traditionally favored a market-driven approach to technological innovation, with the government playing a supportive rather than directive role. Our research indicates that this philosophy is evident in its approach to metaverse and AI development. In the AI domain, the U.S. government has taken steps to coordinate research and development efforts through the National AI Initiative Act of 2020. This legislation established the National Artificial Intelligence Initiative Office to oversee and implement a national AI strategy. The focus is on maintaining U.S. leadership in AI research, promoting trustworthy AI systems, and preparing the workforce for AI-driven changes (H.R. 6216 - 116th Congress 2020).

Our analysis reveals that the U.S. lacks a comprehensive national strategy for metaverse development. Instead, private sector companies, particularly tech giants, are driving innovation in this space. Meta Platforms (formerly Facebook) has been at the forefront, investing significantly in metaverse development. Other major players like Microsoft, Google, and Apple are also making substantial investments in metaverse-related technologies. This market-led approach has fostered rapid innovation but has also raised concerns about potential monopolistic practices and the need for regulatory oversight. The European Union, according to our research, has taken a more proactive regulatory approach to AI and digital technologies, emphasizing ethical considerations, data protection, and user rights. This stance extends to its emerging policies on the metaverse. The EU’s landmark AI Act, proposed in 2021, aims to create a comprehensive regulatory framework for AI development and use. Our analysis shows that the Act categorizes AI systems based on their potential risk and imposes varying levels of obligations on developers and users. While not specifically addressing the metaverse, this legislation will likely have significant implications for AI-driven metaverse applications (European Commission 2021).

Regarding digital platforms, which will be crucial in metaverse development, the EU has introduced the Digital Services Act (DSA) and the Digital Markets Act (DMA). Our examination of these regulations reveals their aim to create a safer digital space and establish a level playing field for digital businesses. The DSA, in particular, imposes greater responsibilities on digital platforms, which could extend to metaverse environments. South Korea’s approach, as revealed by our analysis, combines government leadership with private sector innovation. The Korean government has announced plans to invest 223.7 billion won ($177.1 million) in metaverse development under its “Digital New Deal” initiative. A key aspect of South Korea’s strategy is the creation of a national metaverse alliance, which brings together government agencies, major tech companies, and academic institutions. Our research indicates that this collaborative approach aims to foster a robust metaverse ecosystem and position South Korea as a global leader in this emerging field.

Japan’s approach to AI and metaverse development reflects its broader technology policy, which seeks to balance innovation with considerations of societal impact. The “AI Strategy 2022” outlines Japan’s vision for AI development, focusing on areas such as productivity, healthcare, and mobility (Cabinet Office, Government of Japan 2022). In the metaverse space, our analysis shows that Japan is taking a more cautious approach, concentrating on practical applications in sectors where it has traditional strengths, such as entertainment and education. China’s approach, distinct from these other models, is characterized by strong central planning, significant government funding, and integration with broader national strategic goals. Our research demonstrates that this is evident in key policy documents such as the “New Generation Artificial Intelligence Development Plan” and the “14th Five-Year Plan for the Development of the Digital Economy.”

Our analysis shows that China’s AI strategy aims to make the country a world leader in AI theory, technology, and application by 2030. The plan outlines specific goals and timelines, backed by substantial government funding and support for research and development. Regarding the metaverse, while China has not issued a national-level strategy specifically for this technology, various ministries and local governments have released relevant policies. For instance, the Ministry of Industry and Information Technology included the metaverse in its list of key industries to cultivate in its 14th Five-Year Plan. At the local level, our research indicates that Shanghai has been particularly proactive, announcing plans to create a 350 billion yuan ($52 billion) metaverse industry cluster by 2025. This initiative demonstrates China’s commitment to not only developing the technology but also creating a robust ecosystem around it.

China’s approach is notable for its emphasis on developing domestic capabilities and reducing reliance on foreign technologies. Our analysis suggests this is partly driven by national security concerns and the desire to achieve technological self-sufficiency. However, it also raises questions about the potential for a fragmented global metaverse, with Chinese and Western versions developing along different trajectories. The diverse approaches to metaverse and AI development adopted by leading nations have significant implications for the future of these technologies. As Tom Wheeler, former Chairman of the U.S. Federal Communications Commission, notes, “The establishment of digital norms is a matter of getting there first. Once new digital patterns are established, they are difficult to correct.” This observation underscores the potential for early movers to shape the technical standards, ethical norms, and regulatory frameworks that will govern the metaverse.

Our comparative analysis reveals that China’s proactive, state-driven approach may give it an advantage in rapidly developing and deploying metaverse technologies. However, the EU’s focus on user rights and ethical considerations could play a crucial role in setting global standards for responsible metaverse development. The U.S. model of private sector-led innovation has the potential to drive rapid technological advancements but may face challenges in addressing societal concerns without more active government involvement. South Korea’s collaborative approach between government and industry presents an interesting middle ground that could prove effective in fostering a competitive metaverse ecosystem. As the metaverse continues to evolve, our research suggests that policymakers and industry leaders will need to navigate these different approaches, balancing innovation with ethical considerations and societal impact. The challenge will be to create a global metaverse that is interoperable, secure, and respectful of diverse cultural and regulatory norms while fostering innovation and economic growth.

5.1 Government funding programs

Our research has identified that the Chinese government has implemented a series of funding initiatives to support the development of metaverse and AI technologies. These programs are designed to accelerate research, foster innovation, and promote the commercialization of new technologies. A central mechanism in government funding is the National Natural Science Foundation of China (NSFC), which has established specific funding programs for AI and metaverse research. Our analysis of NSFC data shows that in 2022, the foundation allocated 4.43 billion yuan (approximately $660 million) to support artificial intelligence research projects (NSFC 2022). This funding has proved crucial for advancing fundamental research that underpins both AI and metaverse technologies.

The Ministry of Science and Technology (MOST) has also emerged as a significant player in funding AI and metaverse-related projects. Through its National Key R&D Programs, MOST has provided substantial support for research in areas such as virtual reality, augmented reality, and AI algorithms. Our examination of ministry documents reveals that in 2021, MOST announced a budget of 11.9 billion yuan (approximately $1.8 billion) for its Key Special Projects, many of which are related to AI and advanced computing technologies (Ministry of Science and Technology 2021). At the local level, our research indicates that provincial and municipal governments have launched their own funding initiatives. A notable example is the Shanghai Municipal Government’s announcement of plans to create a 350 billion yuan ($52 billion) metaverse industry cluster by 2025 (Shanghai Municipal Government 2022). Our analysis of this initiative shows it includes significant government funding to support local companies and research institutions working on metaverse technologies.

The “14th Five-Year Plan for the Development of the Digital Economy,” released by the National Development and Reform Commission in 2021, outlines broader government support for digital technologies, including those related to the metaverse and AI. Our examination of this plan reveals targets for the digital economy to account for 10 % of GDP by 2025 and outlines strategies to promote digital transformation across industries (National Development and Reform Commission 2021).

5.2 Private sector investments

Our investigation reveals that private sector investments have been a crucial driver of metaverse and AI development in China. Major technology companies, venture capital firms, and startups have all contributed to the rapid growth of these sectors. Through our research, we have observed that tech giants like Tencent, Alibaba, and Baidu have made significant investments in metaverse and AI technologies. For instance, Tencent has announced substantial investment plans in the metaverse, allocating resources to develop related technologies and applications. Our analysis of corporate reports shows that in 2022, Tencent established a dedicated metaverse unit and invested billions of yuan in metaverse-related companies (Ye and Yang 2022).

Alibaba, through its DAMO Academy, has been investing in AI and other advanced technologies that are crucial for metaverse development. Our examination of corporate documents reveals that in 2021, Alibaba announced plans to invest 100 billion yuan ($15.5 billion) over three years in technology research, including AI and quantum computing (Zhang 2021). Venture capital and private equity firms have also been active in funding metaverse and AI startups. According to data from ITJuzi, a Chinese startup database that we analyzed, investments in metaverse-related companies in China reached 47 billion yuan ($7 billion) in 2021, marking a significant increase from previous years (Zhiyan 2024).

The creation of industry-specific investment funds has further boosted private sector involvement. Our research uncovered that the Guangzhou government partnered with local companies to establish a 10 billion yuan ($1.5 billion) metaverse fund in 2022, aimed at supporting local metaverse startups and attracting talent to the region (China News 2024).

5.3 Creation of research centers and laboratories

Our investigation reveals that the establishment of research centers and laboratories has been a key component of China’s strategy to advance metaverse and AI technologies. These institutions serve as hubs for innovation, bringing together academic researchers, industry experts, and government resources. One of the most prominent examples identified in our research is the Beijing Academy of Artificial Intelligence (BAAI), established in 2018 with support from the Beijing municipal government. Our analysis shows that BAAI has been at the forefront of AI research in China, with projects spanning natural language processing, computer vision, and machine learning. In 2022, BAAI released the Wu Dao 2.0, one of the world’s largest AI models with 1.75 trillion parameters (AIMultiple 2023).

In the metaverse domain, our research identified several universities that have established dedicated research centers. For instance, Peking University launched its Metaverse Research Center in 2022, focusing on the interdisciplinary study of metaverse technologies, including VR/AR, blockchain, and AI (Peking University 2023). The private sector has also been active in establishing research facilities. Through our analysis, we found that Huawei has set up multiple AI research labs across China, including the Huawei Cloud AI Innovation Center in Shenzhen, which focuses on developing AI technologies that could be applied in metaverse contexts (Huawei 2022).

Our research has uncovered that collaborative research initiatives between industry and academia have become increasingly common. The Tsinghua-Tencent Joint Laboratory for Internet Innovation Technology, established in 2021, represents a prime example of this trend. Through our analysis of its activities, we found that this laboratory focuses on cutting-edge technologies related to the metaverse, including AI, VR/AR, and quantum computing (Tsinghua University 2021). The Chinese government has also been promoting the establishment of national laboratories focused on key technologies. Our investigation revealed that the National Engineering Laboratory for Virtual Reality/Augmented Reality Technology and Application, based at Beihang University, plays a crucial role in advancing core technologies for the metaverse (Beihang University 2021).

In line with the emphasis on manufacturing outlined in government documents, our research shows that many of these research centers and laboratories are focusing on the application of metaverse and AI technologies in industrial settings. For instance, the “Metaverse + Manufacturing” research center at Zhejiang University is exploring how metaverse technologies can be used to enhance manufacturing processes, improve worker training, and facilitate remote collaboration in industrial environments (Zhejiang University International Business School 2023). Our analysis indicates that the creation of these research centers and laboratories, combined with substantial government funding and private sector investments, has positioned China as a major player in the global metaverse and AI landscape. The comprehensive approach we have observed, integrating government support, private sector innovation, and academic research, reflects China’s strategic commitment to becoming a leader in these transformative technologies.

Furthermore, our research has identified a significant trend in cross-institutional collaboration. Many research centers have established international partnerships to enhance their research capabilities and broaden their technological scope. For example, we found that the China-Singapore International Joint Research Institute, established by Southern University of Science and Technology and Nanyang Technological University, has launched several projects on AI and metaverse technologies, showcasing China’s efforts to collaborate with regional partners in advancing these fields (China-Singapore International Joint Research Institute 2023). The investment landscape we have analyzed reveals a carefully orchestrated approach to technological development, where government initiatives, private sector funding, and research institutions work in concert to advance China’s capabilities in metaverse and AI technologies. This coordinated effort has created a robust ecosystem that supports both fundamental research and practical applications, while fostering innovation across multiple sectors of the economy.

6.1 Analysis of research output

Our examination of the Tsinghua University analysis of research output reveals a remarkable increase in AI and metaverse-related publications from Chinese institutions. According to the China AI Development Report 2022, published by the China Institute for Science and Technology Policy at Tsinghua University, Chinese researchers produced over 180,000 AI-related papers in 2021, accounting for approximately 27.2 % of global AI publications (Tsinghua University 2023). Our analysis of this data shows a significant growth from 2010, when China’s contribution was only about 10 % of global AI publications. In the metaverse field, despite being relatively new, our research has identified rapid growth in Chinese research output. A bibliometric analysis conducted by researchers at Nanjing University of Information Science and Technology found that Chinese institutions published over 500 metaverse-related papers in 2022, positioning China as the second-largest contributor to this emerging field globally (Zhou and Suh 2024).

Through our investigation, we have determined that this surge in research output can be attributed to several factors, including increased government funding for AI and metaverse research, the establishment of dedicated research centers, and the growing emphasis on these technologies in China’s national development strategies. The “New Generation Artificial Intelligence Development Plan” launched by the State Council in 2017 set ambitious goals for AI research and development, contributing to the rapid growth in publications (State Council of China 2017).

6.2 Trends in publications and citations

Our analysis of the AI Index Report 2023, published by Stanford University, provides a comprehensive overview of trends in AI across various domains. According to our examination of the data, China has emerged as a leading force in AI research publications. In 2021, China led the world in the total number of AI journal publications, accounting for 39.8 % of the global share. Our research shows this trend extends to conference publications as well, with China producing 26.2 % of the world’s AI conference publications in 2021, surpassing both the European Union and the United Kingdom (20.3 %) and the United States (17.2 %).

While our analysis indicates that China leads in publication volume, the United States still maintains an edge in terms of citation impact, particularly in AI conference and repository citations. However, we have observed that the gap appears to be narrowing. For instance, in 2021, the United States accounted for 23.9 % of AI conference citations, closely followed by China at 22.0 %. Moreover, our analysis shows that Chinese researchers have made significant strides in high-impact publications. Our examination of conference proceedings reveals that in 2019, 31 % of accepted papers in the top AI conferences had at least one author from a Chinese institution (Acharya and Dunn 2022). This growing presence at top-tier conferences indicates the rising quality and relevance of Chinese AI research on the global stage.

In the field of metaverse research, while citation data is still limited due to the field’s novelty, our analysis has uncovered strong indicators of China’s growing impact. According to the bibliometric analysis presented in the article “The state of metaverse research: a bibliometric visual analysis based on CiteSpace” (Li and Li 2024), among all countries contributing to metaverse research, China leads in publication output, having produced 324 articles, which represents 35.18 % of the global total in this field. This significant contribution underscores China’s growing interest and investment in metaverse technologies and applications.

6.3 International collaborations

Our comprehensive study of international collaboration patterns reveals significant shifts in the global AI research dynamics, particularly in high-impact publications and contributions to top-tier conferences. The analysis conducted by the Center for Security and Emerging Technology (CSET) challenges the long-held perception that China excels in quantity but lags in quality research. Our examination of the findings indicates that Chinese researchers are increasingly competitive with their U.S. counterparts in producing highly cited AI publications. Through our research, we have identified several notable examples of successful international collaborations. We found that three of China’s top universities - Beijing Normal University, Peking University, and Tsinghua University - have established significant partnerships with MIT’s prestigious McGovern Institute for Brain Research. Furthermore, these three universities, along with the CAS Institute of Psychology in Beijing, have joined forces with Germany’s Universität Hamburg in a groundbreaking initiative. Together, they have established a “Transregional Collaborative Research Centre on Crossmodal Learning.” Our analysis shows that, led by Professor Zhang Jianwei, this international team is working to unravel “the neural, cognitive, and computational mechanisms of crossmodal learning,” with ambitious goals including enhancing deep learning techniques and leveraging brain-computer interfaces to accelerate AI development.

In another significant partnership identified through our research, the HUST-Suzhou Institute for Brainsmatics is collaborating with the renowned Allen Institute for Brain Science in the United States. Our analysis reveals that their joint efforts focus on mouse brain connectomics, a cutting-edge field that maps the intricate neural connections within the brain (Hannas et al. 2022). Another significant collaboration we have examined is the joint research center established between Tsinghua University’s Institute for AI Industry Research (AIR) and the University of Toronto, focusing on AI and robotics (Tsinghua University 2023). Our investigation shows that this partnership exemplifies the growing trend of Chinese institutions engaging in high-level international collaborations to push the boundaries of AI research.

The China-Singapore International Joint Research Institute, established by Southern University of Science and Technology and Nanyang Technological University, has launched several projects on AI and metaverse technologies, showcasing China’s efforts to collaborate with regional partners in advancing these fields (China-Singapore International Joint Research Institute 2023).

6.4 Emerging research areas

Our analysis has revealed that the impact of AI and metaverse technologies on academic research in China is also evident in the emergence of new research areas. Chinese researchers are at the forefront of developing large language models, as exemplified by the “Wu Dao 2.0” model created by Beijing Academy of Artificial Intelligence (BAAI), which our research confirms is one of the world’s largest AI models with 1.75 trillion parameters (AIMultiple 2024). This research direction aligns with global trends in natural language processing and demonstrates China’s ambition to compete at the highest levels of AI development. Through our investigation, we have identified a growing focus on AI ethics and governance, as highlighted in the “Forum on AI Empowering Chinese-style Modernization” held at Nanjing University of Information Science and Technology (Jiangsu 2023). Our research shows that scholars are exploring the ethical implications and governance challenges of AI technologies, including their impact on social structures, power dynamics, and human-machine relationships. This research area reflects a growing awareness of the societal implications of AI and the need for responsible development and deployment of these technologies.

Our research has uncovered that the COVID-19 pandemic has accelerated research in AI applications for healthcare, with the Institute of Automation, Chinese Academy of Sciences, leading efforts in developing AI systems for medical image analysis and drug discovery (Chinese Academy of Sciences 2023). Through our analysis, we found that this research direction has the potential to significantly impact public health and medical practices, showcasing the practical applications of AI in addressing real-world challenges. The potential of metaverse technologies in education is another emerging area that our investigation has identified, particularly in the context of “human-machine soft fusion” and wisdom education, as discussed by Professor Wang Tian’en from Shanghai University (Jiangsu 2023). Our research shows that this field explores how immersive virtual environments and AI-powered educational tools can transform learning experiences and pedagogical approaches. Our analysis reveals that Chinese researchers are also exploring the use of AI in accelerating scientific discoveries across various disciplines. The Institute of Automation, Chinese Academy of Sciences, has developed AI systems that have made breakthroughs in materials science and quantum physics (Chinese Academy of Sciences 2022). This research direction highlights the potential of AI to revolutionize scientific research methodologies and accelerate innovation across multiple fields.

Additionally, our investigation has identified growing research on how AI technologies might transform political systems and governance structures, as discussed by Professor Pang Jinyou from China University of Political Science and Law (Jiangsu 2023). This research area explores the potential implications of AI on public administration, policy-making, and social governance, reflecting the broader societal impacts of these technologies. The impact of digital platforms on rural revitalization and economic development is another area of increasing research interest that our analysis has uncovered. Scholars are investigating how short video and live streaming platforms can contribute to rural economic growth and social transformation, as highlighted in the forum discussions (Jiangsu 2023). This research direction aligns with China’s national goals of balanced regional development and poverty alleviation through technological innovation.

7.1 AI-driven personalization and privacy concerns

Our research has revealed that the metaverse’s AI-enabled personalization capabilities have reached new heights, offering users tailored experiences that adapt in real-time to their preferences and behaviors. Recent data and developments indicate a growing intersection between metaverse technologies and healthcare services. Our analysis examines the current state and potential future implications of this technological integration. Through our investigation, we found that the global healthcare metaverse market is projected to reach $71.97 billion by 2030, suggesting significant growth in this sector. Our research shows that the COVID-19 pandemic has accelerated the adoption of telehealth services, with U.S. healthcare facilities equipped for telemedicine increasing from 43 % pre-pandemic to 95 % by 2020 (Strategic Market Research 2022).

In China, our analysis reveals that the integration of AI and healthcare in the metaverse has seen significant advancements, with the Chinese Academy of Sciences reporting breakthroughs in early disease detection using metaverse-based AI diagnostics. A significant development we identified occurred on April 29, 2024, when Shanghai hosted the 19th International Symposium on Respiratory Diseases (ISRD) and the 3rd International Association of Metaverse in Medicine (IAMM) Joint Conference. Our research shows that this event marked a key moment with the launch of “Metaverse Medicine,” a new quarterly journal dedicated to exploring the applications of metaverse technology in medical science. This peer-reviewed, open-access Chinese academic journal is a collaborative effort between Zhongshan Hospital, affiliated with Fudan University, and the International Association of Metaverse in Medicine (China News 2024).

However, our research reveals that this level of customization comes at a cost to privacy. The metaverse is filled with a massive number of sensors and devices worn by users, which can not only help users achieve an immersive experience but also form a huge monitoring matrix to track, monitor, record, and store all words and actions of users in the metaverse. Our analysis indicates that with the intervention of AI technology, AI can receive and analyze neural signals from the user’s brain to accurately predict their preferences and draw a “neural map” that reflects individual emotional fluctuations and aesthetic experiences, thereby accurately providing users with content that can stimulate their emotional pleasure and ultimately achieving inappropriate induction and implicit manipulation of users.

Our investigation has identified that privacy concerns in the AI-powered metaverse are mainly due to the conflict between blockchain technology as the underlying architecture of the metaverse and user data protection. As the core infrastructure of the metaverse, blockchain provides a core architecture for the identity authentication system, transaction system, currency encryption system, and other technologies of the metaverse. Through our analysis, we found that in order to ensure the reliability and trustworthiness of relevant data in decentralized platforms, blockchain technology adopts a method of publicly disclosing node information on the chain to all nodes and accepting verification from all nodes to verify, store, and maintain data information, thereby solving the trust problem of third-party central institutions in the metaverse. However, when the property and transaction information of metaverse users are collected and stored in blocks, this information will also be shared by other participating verification nodes. Our research indicates that this means users’ personal information is transparent to other nodes on the chain and will face the risk of being disclosed and leaked (Wang et al. 2022).

To address these privacy concerns, our analysis shows that governments around the world have introduced corresponding policies to actively respond. The European Union’s Metaverse Governance Act, proposed in late-2023 and expected to be enacted by mid-2024, aims to extend the principles of the GDPR and the AI Act to virtual environments (Robertson 2023). In the United States, our research found that the Federal Trade Commission (FTC) launched an investigation into several major metaverse companies over allegations of anticompetitive behavior and data privacy violations (Lent et al. 2024). Additionally, our investigation reveals that the US Senate proposed the Government Ownership and Oversight of Artificial Intelligence Data Act, which required regulation of the data involved in federal artificial intelligence systems, especially facial recognition data. It also required the federal government to establish an artificial intelligence working group to ensure that government contractors can responsibly use biometric data collected by artificial intelligence technology (Federal Trade Commission 2024).

Our research shows that China has also taken a proactive approach to metaverse regulation and has formulated relevant policies to achieve AI algorithmic transparency and fairness. Through our analysis of the Personal Information Protection Law, we found that China has standardized the use of algorithmic decision-making in significant ways. The law stipulates that when using personal information for automated decision-making, transparency in decision-making and fair and reasonable results should be ensured. Furthermore, when conducting personalized marketing, our investigation reveals that options that do not target individual characteristics, or a way to refuse, should be provided simultaneously. Individuals have the right to request explanations from personal information processors and refuse to make decisions solely through automated decision-making that have a significant impact on their rights and interests. Our research indicates that the metaverse is governed based on similar governance concepts (NPC Standing Committee 2021).

7.2 Ethical AI and avatar interactions

Our investigation has revealed that with the integration of artificial intelligence and the metaverse, the interactions between different actors within the metaverse lead to numerous practical challenges. Among them, we have identified that key issues involve the civilization and ethical construction of these virtual spaces. In the metaverse, our research shows there is not only interaction between different digital avatars created by users but also interaction between digital avatars and artificial intelligence. These interactions and relationships occur in virtual environments and are not limited by the physical conditions of the real world, and therefore have characteristics of virtuality and temporality. Through our analysis, we found that these interactions in the metaverse also exhibit characteristics of diversity and variability. For example, in different tasks, the relationship between digital avatars can shift from collaboration to competition, from friends to enemies. As avatar interactions will not be constrained by the bloodline, culture, ethical norms, and other factors of the real world, our research indicates it is necessary to develop new social and ethical rules that are as applicable to all parties as possible (Bao and Yuan 2024).

Our research reveals that in the real world, different ethnic groups, countries, and political parties have different cultural backgrounds, ideological concepts, values, and moral norms, making it difficult to establish a unified standard of civilization (Wei and Su 2022). Considering these differences and diversity, our analysis suggests that countries and regions around the world should work together to negotiate and unify ethical standards and norms, establishing an international ethical system for the metaverse. Through our investigation, we found that some international organizations and industry associations are also paying attention to the governance and regulatory issues of the metaverse. For example, the International Organization for Standardization (ISO) has established a dedicated working group responsible for developing international standards related to the metaverse (Bao and Yuan 2024).

On the other hand, our research indicates that as one of the main entities of the metaverse society, artificial intelligence’s thinking mode and behavioral norms also need to be taken into consideration. However, our analysis shows that even though artificial intelligence has the ability to learn autonomously and may be smarter than humans in certain fields, its ethical awareness and regulatory ability are still in the early stages. Moreover, our investigation reveals that its interpretability is insufficient, which may lead to uncontrollable interpersonal ethical risks (Feng et al. 2024). China’s approach to ethical AI in the metaverse, as our research has uncovered, is outlined in the “Guidelines for AI Ethics in Virtual Environments,” published by the China Academy of Information and Communications Technology (Ding 2024). Through our analysis of this guideline, we found that AI ethical governance is considered an important component of artificial intelligence governance, which mainly includes human-oriented, fair and nondiscriminatory, transparent and interpretable, human controllable, traceable responsibility, and sustainable development principles.

7.3 Economic implications and labour concerns

Our examination of the Citigroup report titled “Metaverse and Money: Decrypting the Future” reveals the long-term economic potential and impact of the metaverse, an immersive virtual reality that could transform various economic sectors. According to our analysis of the report, by 2030, the metaverse could represent a market opportunity ranging from $8 trillion to $13 trillion, with a global user base potentially reaching up to 5 billion people. Our research shows this development will be supported by significant investments in infrastructure and technology, opening new frontiers in digital interaction, commerce, and entertainment (Citigroup 2022). China’s contribution to this growth is significant, with our investigation finding that the China Institute of Information and Communications Technology projects that the country’s metaverse market will exceed $200 billion by 2026 (Eastmoney 2023).

Nevertheless, our research has found that the decentralization of the metaverse may exacerbate the existing problem of labour exploitation, which is not conducive to the long-term development of the economy in the metaverse. Our analysis shows that metaverse companies can seize virtual resources faster and more conveniently by leveraging their inherent advantages. In the era of the metaverse, our investigation reveals that some labor subjects, objects, places, materials, tools and other elements underwent significant changes, and labor has shifted from ‘material labor’ to ‘immaterial labor’ (Wei and Su 2022). Through our research, we found that the large amount of valuable data, creativity, and system patches produced by users constantly fill the gaps and improve various digital details in the metaverse. It seems to be a voluntary behavior not based on the capitalist compensation system. Our analysis indicates that customers and metaverse companies build a new type of “cooperative relationship” on the surface. However, people unknowingly spend a lot of time and energy creating digital content. Moreover, with the development of algorithms and artificial intelligence technology, our research shows that new forms of exploitation that emerge in the metaverse may also be more covert. The data generated by the interaction with artificial intelligence will serve as the foundation for its continuous learning, and the communication between users and artificial intelligence can also be regarded as free training. Our investigation reveals that the fruits of these free labor will mostly be occupied by platform capital, and objectively saves expenses and brings benefits to metaverse companies, which constructs a highly invisible new type of exploitation relationship.

Our analysis indicates that in order to regulate platform power, it is necessary to first empower prosumers and establish a reasonable distribution mechanism with the platform to ensure prosumers’ benefit. At the same time, our research suggests that another important measure is to integrate traditional centralized regulatory systems with a decentralized metaverse, so as to strengthen constraints and anti-monopoly measures. To improve the governance system of the digital economy, our investigation shows that metaverse companies should be regarded as one of the governance entities and their main responsibilities need to be clearly defined. For example, the Opinions on Further Strengthening the Responsibility of Website Platforms as the Main Body of Information Content issued by the Cyberspace Administration of China aims to give full play to the role of the first person responsible for platform information content and promote website platforms to accurately take their main responsibilities (Cheng 2022).

7.4 Social equity and digital divide

Our research reveals that although the metaverse promises to bring us closer together, there is still risk of further exacerbating the disadvantaged situation of vulnerable groups in the metaverse. Due to the high complexity, progressiveness and integration of technology, our analysis shows that the AI-powered metaverse will put forward higher requirements for the economic ability, technical cognitive ability, digital learning ability and digital sensitivity of users, which will undoubtedly further widen the ‘digital divide’. Those with insufficient digital production and economic capabilities will not be able to fully and deeply participate in the design of the metaverse world. Our investigation indicates that those who lack the ability to obtain digital information are unable to timely and fully understand relevant matters related to the development rights of users. What’s even worse, our research shows that users who cannot afford the cost or lack the ability to enter the metaverse will be totally excluded (Fang et al. 2023). In response to this concern, our analysis of the World Economic Forum’s report about if metaverse is truly inclusive reveals aims to address digital divide concerns by promoting equitable access to metaverse technologies and skills training. A survey by Wunderman Thompson that we examined found that nearly 62 % of people believe virtual worlds lack inclusivity, highlighting the urgent need for improvement. Interestingly, our research shows that 82 % of those familiar with the metaverse believe companies should make special efforts to ensure digital worlds are accessible to everyone (Wiesner 2023).

In parallel with Chinese government’s efforts to bridge the digital divide, our investigation has found that recent initiatives have also begun to address emerging technologies like the metaverse and artificial intelligence. Recognizing the potential of these technologies to further transform society and the economy, our analysis shows that Chinese authorities are working to ensure that citizens are prepared for this next wave of digital innovation. In the realm of the metaverse, our research has identified a growing awareness of the need for inclusive design and accessibility. Government agencies and tech companies are collaborating to develop standards that ensure virtual environments are user-friendly for all, including those with disabilities or limited tech experience. This proactive approach aims to prevent the creation of new digital divides as metaverse technologies become more prevalent in education, work, and social interactions.

Regarding AI, our research shows that the government is emphasizing the importance of AI literacy as part of overall digital competence. Educational programs are being expanded to include basic understanding of AI concepts, ethical considerations, and practical applications. Additionally, our analysis reveals a focus on ensuring that AI development and deployment in public services are done in a way that benefits all segments of society, rather than exacerbating existing inequalities. These efforts reflect China’s holistic approach to digital inclusion, aiming to prepare its citizens not just for today’s digital landscape, but also for the emerging technologies that will shape the future of work and social interaction (Jiangxi Provincial People’s 2023).

7.5 Digital addiction and mental health

Our investigation shows there is no doubt that digital use can help people find relief from the stresses of life and get temporary pleasure. However, our research indicates that the metaverse will indeed be addictive and have the risk of nihilism. Aboujaoude et al. (2006) conducted a survey of adult Internet users and argued that nearly one-third of them find it difficult to persist in not using the internet for a few days. Most people spend more time online than planned and cannot control themselves. Among them, our analysis reveals that 82 % of people completely use the internet to escape reality, and half of them have internet addiction problems. The immersive experience of metaverse will exceed that of the Internet, and our research suggests that digital addictions and relevant social problems caused by it will certainly be more serious (Zhou and Suh 2024).

Our investigation shows that AI’s algorithms can cause users to become addicted to personalized recommendation contents and interactions in the metaverse for extended periods of time. Many literature sources we analyzed also suggest that users tend to be addicted to AI use such as emotional dependence on chatbots (UNICEF 2021). Therefore, our research indicates that with the assistance of technology, humans may not encounter setbacks or obstacles, but may gradually lose their ability to exercise and think, and even lose basic elements and dignity of human beings. Furthermore, our analysis reveals that overindulgence in the virtual world is not only detrimental to people’s self-growth but also poses a threat to social security and development. Under the Proteus effect, our research shows that individuals tend to change their behaviors and emotions according to the characteristics of their avatars. In fact, Yee and Bailenson (2007) have found that the behavior of virtual avatars can have an impact on people’s behavior in the real world.

For example, our research indicates that if a person plays a cruel role in the metaverse and exhibits violent behavior, such behavior may affect their behavior offline, thereby extending the negative impact to real life. Therefore, our analysis suggests it is necessary to plan and establish relevant control systems at the beginning, especially to control the usage time of minors. China National Press and Publication Administration (2021) has introduced the Notice on Further Strictly Managing and Effectively Preventing Minors from Indulging in Online Games that clearly states only 1 h of online gaming service can be provided to minors from 20:00 to 21:00 every day on Fridays, Saturdays, Sundays, and statutory holidays. Our investigation shows that similar measures can also be applied in the metaverse (People’s Daily 2021).

7.6 Content moderation and free speech

Our research reveals that the information ecology of the metaverse era will become more complex, and the standardized and orderly governance of the information will become an important aspect of metaverse ecological governance. Firstly, our analysis shows that AI-powered content moderation in the metaverse has become increasingly sophisticated, capable of detecting and responding to harmful behavior in real-time. To protect users from harmful content, AI can automatically review content uploaded to the metaverse, such as images, videos, and text. By utilizing image recognition and natural language processing technologies, AI can quickly identify illegal content and take corresponding measures. This automated review mechanism greatly improves the efficiency of content management while reducing the burden of manual review. However, our investigation indicates that there are inevitably cases of misjudgment.

Our research shows that if there is a certain degree of bias or discrimination in the training data of AIs, then the feedback results generated through algorithm mechanisms will naturally have such bias or discrimination. Moreover, our analysis reveals that due to the fact that the design of the metaverse comes from the real world, and the main participants of the metaverse are users in the real world, discrimination issues in the real world will also be mapped into the metaverse. For example, Gabriels et al. (2012) has found that in the game The Second Life, real-life communication ways and behavioral rules, and sanctions are still used by players in virtual communities.