Key facts
- China is reportedly planning to spend approximately 2 trillion yuan ($295 billion) over the next five years on building data centers.
- The initiative aims to create a nationwide network of interconnected computing hubs.
- The plan prioritizes domestic technology suppliers, including Huawei, for AI chips.
- State-owned firms China Mobile and China Telecom are expected to operate the data centers.
- The blueprint is still in early discussions and details may change.
China is reportedly preparing a significant investment of approximately 2 trillion yuan ($295 billion) over the next five years to construct a nationwide network of interconnected data centers. This initiative, detailed in a blueprint drafted by agencies including the National Development and Reform Commission, aims to bolster China's artificial intelligence capabilities and challenge U.S. dominance in the sector. The plan aligns with Beijing's broader ambitions to aggressively adopt AI and lead in emerging technologies like quantum computing and humanoid robots.
State-owned telecommunications giants China Mobile and China Telecom are slated to operate the majority of these data centers. A key aspect of the strategy involves prioritizing local suppliers, such as Huawei Technologies, for at least 80% of the necessary technology, including AI chips. This focus on domestic sourcing is intended to effectively squeeze out U.S. competitors like Nvidia and Advanced Micro Devices. However, the report notes that the data center blueprint is still in its early stages of discussion, and details are subject to change.
This move by China comes as major U.S. technology companies are expected to collectively spend over $700 billion this year on their own AI infrastructure development. Previously, Reuters reported that Chinese government guidance required new data center projects receiving state funds to exclusively use domestically manufactured AI chips.