Yes I believe China has AI controlled drone swarms. I have seen the videos of such (apparently military) drone swarm. And I am sure that with AI controlled drones you can do the same kind of light show, too. But it's just not necessary.
That's right, while AI has a place in drone swarms in military application for real-time dynamic path planning, it is not necessary for a light show.
All light shows are pre-planned, there are more than enough onboard storage space on the drones themselves to store all the GPS waypoints for the entire show. At the end of the day, all each drone needs to do is to follow a pre-defined flight plan, consists of a series of waypoints, and light up the LED appropriately at pre-defined time. There's nothing ultra high tech about it from the control systems perspective. All of the light show drones that I've seen in recent years use some variant of RTK GPS, which gives them millimeter precision for localization. This means, as long as weather is favorable, the show is planned well, and with no hardware failures, the drones will not crash into each other even without any collision avoidance techniques.
As for the ground station, if the drones already have waypoints stored onboard, then there really isn't much communication needed from it. Sending simple commands and perhaps a standardized clock signal is probably all that's needed from Tx point of view. On the Rx side, it would probably need to receive the live status of each drone. There could be drone-to-drone communications to facilitate some form of collision avoidance strategy and/or to enhance communication reliability through a mesh network.
Source: I worked at a drone light show start up in Canada for 3 years after my MASc, and we had a collaboration project with one of the drone light show companies in Beijing.