The US is fighting over data centers. China is building them fast

China’s Data Center Drive Takes Shape on the Edge of the Gobi

Earthguardiansonline.com – On the grasslands and farmland near the Gobi desert, Ulanqab is being reshaped into a major base for China’s artificial intelligence ambitions. The city in Inner Mongolia, home to fewer than two million people, is seeing vast data-center campuses rise among fields of sunflowers and sorghum.

Huawei, Kuaishou and VNET are among the technology companies with a visible presence in the area. Their facilities, alongside numerous projects still under construction, are turning Ulanqab into one of the computing hubs supporting China’s fast-growing AI industry.

Nearly 90 data centers are planned for the city. The scale reflects Beijing’s wider effort to build the computing capacity needed to deploy AI across factories, services and daily life.

Speed, space and energy

The Bayin Big Data Industrial Park illustrates a central advantage in China’s technology buildout: rapid construction. Much of the densely developed park was erected in only two years, with rows of large facilities now standing where open land dominated recently.

Ulanqab’s physical conditions are also attractive for such projects. Strong winds, intense sunlight and wide expanses of available land offer access to lower-cost renewable energy and room for large industrial sites. Data centers consume enormous quantities of electricity, making both power availability and price especially important.

China still trails the United States in AI data-center capacity. Stanford University research showed that the US had roughly 10 times as many AI data centers as China as of last year, while other estimates point to a much wider US lead in computing power.

American firms also retain access to the most sophisticated chips, a crucial component for training and operating advanced AI systems. Chinese companies face tighter supplies of high-end hardware, even as they pour money into buildings, servers and related infrastructure.

A buildout with little visible resistance

Unlike in parts of the United States, where proposed data centers have prompted debate over electricity demand, water use and neighborhood impacts, large-scale construction in Ulanqab has encountered no comparable public opposition.

On a recent weekday at the Bayin industrial park, workers passed facial-recognition checks at construction entrances while trucks brought materials into the expanding complexes. Around the building sites, temporary vendors sold food and cigarettes to construction crews.

For some nearby residents, the development has brought a new flow of customers to an economy traditionally centered on agriculture. Ma Rong, 56, has operated a grocery store and guest house in the area for three decades. He said the arrival of projects and migrant workers has transformed the pace of 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 the change had produced a clear improvement.

“Our business has gotten much better than before,”

Not every consequence has been seamless. Liu Baoping, 58, who runs a restaurant, said he had to leave his original location after a highway demolition. Yet he said his daily customer base has doubled as the data-center projects expanded.

“The environment isn’t as clean as before, but people’s incomes and the economy – it’s way better,”

AI as an economic priority

Ulanqab forms part of a national strategy that treats AI as a potential source of growth at a time when China faces a slowing economy and a shrinking population. The goal is not limited to developing chatbots or software products. Chinese leaders have promoted the use of AI in areas ranging from healthcare and consumer goods to industrial production.

At a global artificial intelligence conference in Shanghai in July, Chinese leader Xi Jinping said China had welcomed AI enthusiastically. He highlighted efforts to bring the technology into manufacturing and described that effort as a defining feature of Chinese modernization.

Official figures indicate that more than 700 million people in China already use AI. Expanding its role across society requires more than consumer applications: it depends on networks, storage, servers and the immense processing power housed in places such as Ulanqab.

Last month, Beijing announced a $560 billion program to expand information infrastructure, including computing facilities, over the coming five years. Listed Chinese companies are also increasing spending on AI infrastructure, with Rhodium Group projecting their investment will double this year to about $139 billion.

That sum remains far below the estimated $800 billion being invested in AI data centers by listed US peers. The contrast underscores the nature of the competition: China is scaling physical infrastructure at striking speed, while the United States maintains substantial advantages in capital, existing computing capacity and access to leading chips.

For Ulanqab, the race is already visible in concrete, cooling systems and construction cranes. Its transformation shows how China is using land, energy resources and centralized planning to narrow parts of the AI infrastructure gap, even as major technological constraints remain.