The Chinese government is reportedly preparing to invest about 2 trillion yuan (approximately 1.2 trillion ringgit) nationwide over the next five years to build data centers, aiming to boost its domestic artificial intelligence (AI) industry and surpass the United States in this key field.
Bloomberg reported on Tuesday, quoting informed sources, that multiple government departments including the National Development and Reform Commission are drafting a blueprint to establish a nationwide interconnected computing hub network.
One source indicated that state-owned enterprises such as China Mobile and China Telecom will be responsible for operating most of the data centers and ensuring their interoperability. The core concept of the plan is that at least 80% of key technologies (such as AI chips) will directly rely on domestic suppliers like Huawei, effectively eliminating dependence on American AI chip giants such as Nvidia and AMD.
The source said the blueprint is still at a preliminary discussion stage, and specific details may change. This move highlights that, despite shrinking fiscal spending in some areas due to rising government debt pressure, Beijing remains determined to focus efforts on advancing cutting-edge technologies.
This 2 trillion yuan funding will mainly be raised through the issuance of sovereign debt (including ultra-long-term special government bonds with maturities of over 10 years) and strategic industrial government investment funds, supplemented by bank loans and private capital. The budget does not yet include investments from private tech giants such as Alibaba and Tencent.
The report pointed out that this blueprint is a major component of the “Six Networks” construction plan first announced by Chinese authorities in March this year. This 7 trillion yuan (about 4.2 trillion ringgit) plan focuses on strengthening basic infrastructure, including water networks, new power grids, computing networks, next-generation communication networks, urban underground pipelines, and logistics networks.
Sources revealed that in addition to computing facilities such as data centers, China also plans to deeply integrate new power grids with AI infrastructure projects, which could push the projected total investment scale to at least 5 trillion yuan (about 3 trillion ringgit).
It remains unclear how this envisioned unified computing power network will coordinate with private enterprises' data hubs, but the overall goal is to fully interconnect the nation’s fragmented data facilities by 2028, building a highly integrated computing network to accelerate the adoption of AI technologies in public service fields such as healthcare, transportation, and urban management.
This overall plan is Beijing’s most aggressive move yet to strengthen the foundation of China’s AI industry. It continues the previous strategy of concentrating resources to support “national team” enterprises to gradually replace U.S. technology.
Boosted by this news, the main Chinese data center service providers saw their shares rise on the U.S. stock market. After Bloomberg’s report was released, GDS Holdings (GDS) rose as much as 12% in pre-market trading, while Vnet (Vnet) jumped 17%.
Bloomberg Industry Research analysis pointed out that this infrastructure build-out will effectively support China’s “AI+” strategy, by widely applying AI across various sectors to comprehensively enhance economic productivity. The primary beneficiary of this plan will be the macro economy rather than private companies like Tencent and Alibaba. However, among those who will benefit from this wave, domestic infrastructure suppliers such as Huawei will be the biggest winners, while Nvidia is unlikely to get a share of the pie.