China is rapidly building data centres across its energy-rich hinterland, turning abundant electricity and cheap land into a strategic advantage in the global AI race. Beijing views AI progress as a national priority to boost economic productivity and global influence. Despite chip shortages, China has mobilised land, power, and construction capacity to build vast computing hubs like Ulanqab in Inner Mongolia, where 89 data centres are built or planned.
The country already has 24 gigawatts of operational data centre capacity—more than the rest of Asia combined but less than half the US’s 56GW. Another 50GW is under construction or announced. Ulanqab, a remote agricultural city known for potatoes and yoghurt snacks, has committed about 15GW of computing capacity, making it Asia’s fastest-growing data centre hub.
The city benefits from abundant wind and coal power, cheap land, a cold climate, and rapid construction capabilities—advantages increasingly scarce elsewhere. In contrast, the US faces constraints from electricity and grid access. Companies like Alibaba, Huawei, ZData, VNET, Byte Dance, Deep Seek, and Z.ai are building or operating facilities in the region.
Huawei’s rotating chair, Eric Xu, noted the city’s surprising scale and strategic location just two hours from Beijing by high-speed rail. Engineers are even converting an abandoned high school into a data centre. The FT observed work by at least a dozen companies across four sprawling campuses.
This expansion is part of a three-part series examining China’s breakneck AI infrastructure build-out as it aims to become the pre-eminent tech superpower.
Source: Financial Times Companies · Summarized by HeadlinesBriefing