China is planning to invest over 2 trillion yuan ($295.43 billion) over the next five years in building data centres nationwide, according to reports from Bloomberg News. The National Development and Reform Commission is leading the creation of a plan to establish a nationwide network of interconnected computer hubs. This represents a fundamental national effort to build the digital infrastructure needed to challenge US dominance and train sophisticated AI models. The project would be operated largely by state-backed telecom giants such as China Mobile and China Telecom, with the effort reflecting Beijing's broader push to strengthen its AI infrastructure and reduce dependence on US chips and cloud services.
The initiative addresses Beijing's access to high-end AI hardware, which is restricted by US export regulations. As reported by Bloomberg News, the plan is designed to fill a vital requirement for domestic processing power. China's new five-year strategy roadmap outlines goals to dominate emerging technologies like quantum computing and humanoid robots, as well as aggressively implement AI throughout the world's second-largest economy. The move shows that AI infrastructure is now national policy, with China not just trying to build better models but control the compute layer, the power layer, and the supply chain behind the next generation of AI systems.
The majority of the data centres will be run and connected by state companies like China Mobile and China Telecom, according to Bloomberg News. To meet high AI demands, large server farms are being moved to regions with abundant renewable energy supplies, as reported by Asia Financial. The plan involves using local suppliers, such as Huawei Technologies, for at least 80% of technology, including AI chips, thereby pushing out Nvidia and Advanced Micro Devices. This approach reflects the broader trend of AI infrastructure becoming a fight over physical infrastructure including water, energy, cooling, zoning, and public consent.
This development occurs at a time when US Big Tech corporations are anticipated to spend over $700 billion on their AI buildout plans this year. The Chinese government set guidelines last year mandating that new data centre projects receiving any state funding utilise only AI processors manufactured in China, according to Reuters. However, the data-centre architecture is still in the early stages of discussion, with specifics potentially subject to change. The AI boom is no longer only about GPUs and models but has become a fight over physical infrastructure, with the tension over water, energy, cooling, zoning, and public consent potentially shaping where future AI campuses are built.
