China Plans $295 Billion AI Data Center Network

The Government of China plans to invest approximately 2 trillion yuan ($295 billion) over the next five years to establish a nationwide network of interconnected AI data centers. Led by the National Development and Reform Commission, the initiative seeks to secure the domestic AI industry and minimize dependence on foreign chipmakers such as Nvidia and AMD.

The project mandates that at least 80% of core technology, including AI chips, be sourced from domestic suppliers like Huawei. State-run corporations China Mobile and China Telecom are expected to manage the majority of these facilities. The effort is a component of the broader Six Networks program, which aims to integrate computing capabilities with power, water, and logistics infrastructure.

Funding for the network will be drawn from sovereign debt, including long-term government bonds, state investment funds, bank loans, and private capital. Although the investment is substantial, it remains below the annual capital expenditures of U.S. technology firms such as Meta and Alphabet.