The Unlikely Place at the Center of China’s AI Boom
Ulanqab, Inner Mongolia, is rapidly emerging as a critical hub for China's AI infrastructure, with massive data center projects underway to support model training. While the region offers low energy costs and natural cooling, the surge in development is creating significant strain on local water resources.
Why it matters
The shift toward building massive, localized compute clusters in remote regions highlights China's strategic push to achieve AI self-sufficiency despite environmental and resource constraints.
In Ulanqab, a city in Inner Mongolia home to about 1.5 million people, nearly 100 data centers have been opened or begun construction since 2016. Chinese companies have pledged to build projects with a combined estimated capacity of 12.5 gigawatts in the city, and over 70 percent of the total commitments have been announced in just the last year, making it one of the fastest growing compute clusters in Asia, according to a research note published by Goldman Sachs last week. For comparison, OpenAI’s $500 billion Stargate Project is set to reach only 10 gigawatts of total capacity when it’s complete.
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