China reportedly planning $295 billion data center network to power AI build-out

Beijing may spend roughly $295 billion (2 trillion yuan) over the next five years to build a nationwide network of AI-focused computing hubs, according to a Bloomberg report.

The blueprint would connect data centers across the country into a unified computing network while prioritizing domestic suppliers such as Huawei for much of the underlying technology. State-owned telecom giants, including China Mobile and China Telecom, would operate much of the infrastructure, per the report.

The proposal, still under discussion, would mark one of China’s most aggressive efforts yet to build an AI infrastructure stack largely independent of US technology.

The AI race is increasingly becoming a competition not just over models and chips, but over access to computing power itself.

China’s latest push suggests Beijing has increasingly treated computing power as a strategic national resource, similar to electricity or transportation infrastructure. The latest blueprint would push that strategy further by connecting fragmented regional data centers into a national computing network.

The latest Digital China Development Report issued by the China National Data Administration found that the country had more than 13.7 million standard server racks in operation by the end of 2025, and had built 42 large-scale AI computing clusters. China’s total intelligent computing capacity has reached 1.59 million PFLOPS, ranking second globally.

A Chinese planning document from the Ministry of Industry and Information Technology targets 2028 for connecting major computing hubs into a unified national system. Much of that infrastructure is expected to be concentrated in regions such as Inner Mongolia, Ningxia, and Gansu, where abundant land and relatively inexpensive power can support energy-intensive AI workloads.

The Chinese documents also highlight the scale of China’s AI ambitions. The country now has more than 6,200 AI companies and an AI industry worth more than $176.9 billion (1.2 trillion yuan), official data shows.

The timing is notable. In May, Washington cleared around 10 Chinese firms to buy Nvidia’s H200 chips, easing some restrictions aimed at slowing China’s AI development.

Bloomberg reported the project could be funded primarily through sovereign debt and state-backed investment funds, underscoring China’s willingness to continue spending on strategic technologies even as broader economic growth slows.