China to Spend $295 Billion on Data Center Network to Oust Nvidia and Lead in AI Race China is set to invest around $295 billion in building a nationwide network of interconnected data centers over the next five years. This initiative, primarily led by state-owned operators, aims to boost domestic AI capabilities by prioritizing local technologies, particularly from Huawei, effectively excluding US competitors like Nvidia and AMD. The plan is part of a broader infrastructure program and may see further investment if integrated with the power grid.

• China plans to invest approximately 2 trillion yuan ($295 billion) in data center construction over five years.
• The goal is to create a unified network of interconnected computing centers, largely operated by China Mobile and China Telecom.
• At least 80% of technologies, including AI chips, will be sourced from local suppliers, mainly Huawei.
• This strategy aims to exclude US companies like Nvidia and AMD from the project.
• Funding will come from sovereign debt, state funds, bank loans, and private capital.
• The project is part of the ‘Six Networks’ program, focusing on essential infrastructure.
• Integration with the power grid could increase total investment to at least 5 trillion yuan.
• The unified network is targeted for completion by 2028 to accelerate AI adoption in various sectors.
• China’s data center construction costs are lower due to cheaper labor and components.
• Private companies like Alibaba and Tencent are also investing in AI but are not included in this specific 2 trillion yuan figure.