China is preparing to pour roughly 2 trillion yuan, about $295B, into building a nationwide network of AI-focused data centers over the next five years. The initiative, spearheaded by the National Development and Reform Commission (NDRC), represents one of the largest single infrastructure commitments in the global AI race and a direct response to tightening US export controls on advanced semiconductors.
The plan carries a mandate that should make Western chipmakers nervous: at least 80% of the hardware and software powering this network, including the AI chips themselves, must come from domestic suppliers. Huawei is the most obvious beneficiary.
What China is actually building
The project envisions a unified computing grid that stitches together data centers across the country, synthesizing earlier infrastructure initiatives into something more cohesive and powerful. The new initiative expands upon China’s existing “Eastern Data, Western Computing” (东数西算) project, which was launched in 2022 and aimed to relocate and enhance data centers in western provinces that offer lower energy and land costs.
State-owned telecom operators China Mobile and China Telecom will handle the heavy lifting of construction and interconnection. China Mobile alone serves nearly a billion subscribers, and both companies have deep experience building out large-scale network infrastructure.
