NANCHANG, Jan. 17 (Xinhua) -- U.S. tech giant Microsoft on Thursday launched an incubator centering on artificial intelligence (AI) and virtual reality (VR) in Nanchang, east China's Jiangxi Province.

The company said the "Microsoft Cloud & Mobile Technology Incubation Program -- Nanchang City AI+VR Innovation Center" will serve start-ups and existing manufacturing companies, empowering them with new technologies.

The incubator, by lending training and other support to tech companies, is expected to boost the VR industry in Jiangxi, which has launched an industrial base for VR technologies, the first of its kind in China.

The government of Honggutan New District, where the incubator is located, said the incubator is expected to lure dozens of AI, VR and other tech companies into the district.

VR, which uses helmets and glasses to simulate a virtual 3D environment that resembles reality, can be widely applied in education and training, medicine, gaming, tourism and online shopping.

China's VR market expanded 164 percent year on year to reach 16 billion yuan (2.37 billion U.S. dollars) in 2017, data showed. The market is likely to exceed 90 billion yuan by 2020, according to the Ministry of Industry and Information Technology.