The US is fighting over data centers. China is building them fast
China Expands Data Center Network as AI Ambitions Accelerate
Qwenews.com – On the plains of Inner Mongolia, near the edge of the Gobi Desert, a rapidly changing landscape reflects China’s drive to build the physical backbone for artificial intelligence. In Ulanqab, rows of large data centers are rising beside farmland where sunflowers and sorghum grow, creating an unexpected concentration of technology infrastructure in a city with fewer than two million residents.
The buildings carry the names of major Chinese technology companies, including Huawei, Kuaishou and VNET. Many are newly completed, while others remain surrounded by cranes, trucks and construction crews. Nearly 90 data centers are planned for Ulanqab, making the city an important part of Beijing’s effort to expand computing capacity for AI and big-data applications.
A race built on computing power
Artificial intelligence depends on enormous volumes of computing power. Data centers house the servers, storage equipment and networking systems that train and operate AI models. For China, building more of these facilities is central to a wider strategy to use AI across manufacturing, health services, consumer products and other parts of the economy.
China remains behind the United States in key areas of the AI competition. Stanford University research showed that the United States had roughly 10 times as many AI data centers as China as of last year, while other estimates point to a much larger American advantage in available computing capacity. US technology companies also have access to the most advanced chips, which remain essential for developing leading AI systems.
Yet Ulanqab illustrates several strengths China can bring to the contest. The Bayin Big Data Industrial Park took shape at remarkable speed, with much of the densely clustered development constructed within two years. The area offers large tracts of land, substantial wind resources and intense sunlight, creating conditions that can support relatively inexpensive renewable energy production.
The region’s open terrain also provides space for a type of infrastructure that can be difficult to build near heavily populated urban centers. Data centers require extensive power supplies, cooling systems and transmission connections, and their construction can become contentious when communities worry about electricity use, water demand, noise or changes to local land use.
Construction reshapes a rural economy
At Bayin, the pace of work is visible from the entrances to the construction sites. Workers pass through security checks that include facial scanning, while trucks deliver materials for buildings still under development. Nearby, temporary vendors sell food and cigarettes to workers arriving from other parts of the country.
For some long-term residents, the surge in activity has brought new customers and more income. Ma Rong, 56, has operated a grocery shop and guest house in the area for three decades. He said the arrival of construction workers transformed the rhythm of his business.
“Before, we’d just sit there and wait for customers. Now we’re constantly busy – picking up orders, doing this and that. We barely get a break,”
Ma said business had improved significantly as the industrial park expanded.
Not every change has come without disruption. Liu Baoping, 58, who owns a restaurant, said he had to leave his original location after a highway demolition. Still, he said the number of customers he serves each day has doubled during the data-center construction boom.
“The environment isn’t as clean as before, but people’s incomes and the economy – it’s way better,”
The development offers a new economic role for an area that has traditionally relied heavily on agriculture. It also underscores how major infrastructure projects can bring immediate gains for local businesses even as they alter transport routes, construction conditions and the character of nearby communities.
Beijing’s broader AI strategy
Ulanqab is one component of a national push to make AI a larger engine of economic growth at a time when China faces slower growth and a shrinking population. Chinese leader Xi Jinping emphasized that priority at a global artificial intelligence conference in Shanghai in July, presenting AI adoption across sectors as part of the country’s modernization agenda.
More than 700 million people in China already use AI, government figures show. That level of adoption ranges from consumer-facing tools to industrial systems, and it increases the need for reliable computing infrastructure. The effort to integrate AI into factories, businesses and everyday services cannot proceed at scale without more data processing capacity.
Last month, Beijing announced a $560 billion plan to expand information infrastructure over the next five years, including computing facilities. The initiative signals that government planning will continue to play a major role in determining where and how China develops its AI infrastructure.
Private companies are increasing their spending as well. Investment in AI infrastructure by listed Chinese companies is expected to double this year to about $139 billion, Rhodium Group research indicates. That remains far below the estimated $800 billion being invested in AI data centers by their US counterparts, highlighting the financial scale of the American lead.
Speed cannot solve every constraint
China’s ability to rapidly build facilities, mobilize construction labor and direct investment toward strategic industries gives it important advantages. Ulanqab’s emergence as a technology hub demonstrates how quickly that capacity can reshape a region.
But additional buildings alone do not remove China’s most serious technological constraints. Chinese companies face limits on the supply of the most advanced hardware needed to fill these centers and support cutting-edge AI development. The country’s data-center expansion may therefore strengthen its ability to deploy AI broadly, while the competition for top-tier chips remains a separate and critical challenge.
For now, the construction boom in Ulanqab offers a clear view of China’s approach: build quickly, build at scale and place computing infrastructure at the center of the country’s long-term AI ambitions.
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