China unveils $295 billion plan to build national AI data centers on homegrown chips by 2028

China drafts $295 billion plan to build national AI data center grid running on 80% homemade silicon -- projected 2028 timeline could run into limits of local chip production

Beijing's spending ambitions run into the reality of limited chip output. China is drafting a plan to spend roughly 2 trillion yuan ($295 billion) over five years on a nationwide web of AI data centers. The goal is for at least 80% of the underlying technology, AI chips included, to be sourced from domestic suppliers such as Huawei, according to a Bloomberg report citing people familiar with the discussions. The National Development and Reform Commission is responsible for the blueprint of this network, while state carriers China Mobile and China Telecom will operate most of the facilities and link them up to a single computing grid by 2028. The build-out of this grid leans heavily on sovereign debt and ultra-long special government bonds. Folding in power grid upgrades could push the total capital requirement beyond 5 trillion yuan, those sources told Bloomberg. Funding the build-out is easy, though; filling them with domestic accelerators is a different story. The 80% domestic sourcing requirement effectively locks out Nvidia and AMD accelerators, so China will be capped by whatever amount of chips SMIC can physically produce. The foundry's most advanced stable node remains its N+2 process, which is roughly equivalent to 7nm and is currently running above 93% utilization, leaving little headroom as every government-certified Chinese chipmaker competes for the same wafer slots. Another major chokepoint is high-bandwidth memory. Highly limited domestic HBM supply constrains how many Ascend-class accelerators Huawei can assemble. Huawei alone shipped around 812,000 chips last year and projects some $12 billion in processor revenue for 2026, a pace that its own supply chain has struggled to sustain. It's estimated that China's domestic suppliers will cover only around 76% of all Chinese AI chip demand by 2030, even as that market grows toward $67 billion. Beijing has massively tightened its restrictions on foreign silicon in a series of new controls. Last August, Beijing introduced a requirement that data centers source at least 50% of chips locally, and by November, state-funded projects were barred from foreign accelerators entirely, with builds less than 30% complete reportedly told to strip out Nvidia, AMD, and Intel parts. China's own industry has questioned whether domestic hardware can keep pace. SMIC co-CEO Zhao Haijun has cautioned that the rush to add capacity risks leaving data centers idle, comparing it to building highways ahead of the traffic. Chinese chip executives have separately conceded the country trails the leading edge in AI data center silicon by five to 10 years. When DeepSeek was steered toward Huawei hardware for model training, it eventually reverted to Nvidia hardware, lending credence to the idea that domestic parts still struggle with the heaviest training workloads, even where they suffice for inference. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

China prepares $295 billion plan to fund nationwide AI buildout, Bloomberg News reports

June 9 (Reuters) - China is preparing to spend around 2 trillion yuan ($295.43 billion) over the next five years on building data centers across the country, Bloomberg News reported on Tuesday, as Beijing looks to challenge the U.S. in the intensifying AI race. National Development and Reform Commission is among key government agencies drafting a blueprint to build a network of inter-connected computing hubs across the country, the report said, citing people familiar ⁠with the matter. China's new five-year policy blueprint laid out its ambitions to aggressively adopt AI throughout the world's second-biggest economy and dominate emerging technologies such as quantum computing and humanoid robots. State firms such as China Mobile and China Telecom will operate the bulk of the data centers and ensure they are connected, according to the Bloomberg News report. The idea is to rely on local suppliers, including Huawei Technologies for ⁠at least 80% of technology such as AI chips, effectively squeezing out Nvidia (NVDA.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab, the report said, adding that the data-center blueprint remains in early discussions and details could change. This comes as Big ⁠Tech companies in the U.S. are expected to spend more than $700 billion this year to fund their AI buildout plans. China Mobile, China Telecom and ⁠National Development and Reform Commission did not immediately respond to Reuters' requests for comment. Reuters reported last year that the Chinese government issued ⁠guidance requiring new data center projects that have received any state funds to only use domestically made AI chips. ($1 = 6.7698 Chinese yuan renminbi) Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

China drafts a $295bn AI data-centre plan to shut out Nvidia

Beijing's most aggressive AI-infrastructure push yet would run on state telcos, sovereign debt, and at least 80% homegrown tech, squeezing out Nvidia and AMD. China wants to win the AI race on its own hardware. A new plan shows just how much it is willing to spend, and how far it will go to cut American chips out of the picture. Beijing is drafting a blueprint to spend around 2 trillion yuan ($295bn) over the next five years building a national network of AI data centres, according to Bloomberg, citing people familiar with the matter. The plan, led by the powerful National Development and Reform Commission, would knit the country's scattered computing facilities into a single, interconnected grid by 2028, mostly operated by state telecoms giants China Mobile and China Telecom. The most pointed detail is what those data centres would run on. The blueprint calls for local suppliers, including Huawei, to provide at least 80 per cent of the core technology, AI chips included, effectively squeezing out Nvidia and AMD. It is a deliberate echo of the campaigns that built national champions like Huawei in the past, now aimed at replacing US technology across the AI stack and closing the gap with American labs. The money would come largely from sovereign debt, including ultra-long-term special government bonds, plus state funds for strategic industries, with bank loans and private capital topping it up. The build is one prong of a broader "Six Networks" programme spanning water, power, and computing, and folding in the power grid could push the total past 5 trillion yuan. "Elevating it to a national strategy ensures policy alignment and capital mobilisation," said Charlie Dai, a principal analyst at Forrester. For all the ambition, the numbers are smaller than they sound next to the West. The $295bn is spread over five years; US firms alone, led by Meta and Microsoft, are setting aside roughly $725bn for AI this year. The Chinese figure also excludes private spending by Alibaba and Tencent, and Chinese data centres are cheaper to build. The point is less the raw sum than the coordination: a state marshalling debt, land, power, and chips behind a single national grid. The timing reflects growing Chinese confidence in its own silicon. Washington has eased up, agreeing to let Nvidia sell its previous-generation H200 chips to Chinese buyers, but shipments have not started, and in May nine homegrown AI chips, from Huawei, Alibaba, Shanghai Biren, and Moore Threads, cleared a domestic security review, opening them to sensitive sectors. Beijing increasingly believes it can fill the gap itself. It is the same sovereignty logic now sweeping the West, from Britain's sovereign-AI push to Europe's scramble to cut its reliance on US clouds, only inverted: where Europe frets about depending on America, China is building to need it as little as possible. The plan is still early, the people cautioned, and details could change. But the direction is unmistakable. The world's two largest economies are each trying to wall off their own AI supply chains, and the era of a single global stack is ending.

Bloomberg: China plans $295bn spend for nationwide data centre build-out

China's core AI industry - which boasts more than 6,200 companies - was valued at nearly $174bn in 2025. China is planning to spend around $295bn - or 2trn yuan - over the next five years to build data centres across the country, Bloomberg news has reported, citing sources close to the matter. The build-out could represent China's most aggressive plan yet to secure the future of its AI industry, the publication reported. The idea is for a resilient Chinese AI industry with an interconnected data centre network and a reduced reliance on foreign technology from companies such as Nvidia and AMD. China also plans to integrate its power grid with the project, sources added. The funds set aside for the project, however, pale in comparison to the likes of Meta, which has a planned capital expenditure spend of as much as $145bn for this year alone, or Alphabet, which has set aside up to $190bn. Much of this spending has been earmarked for AI or compute-related investments. The government spend, though, doesn't account for private AI investment in China, which amounted to around $12.4bn in 2025. Recent reports suggest that Chinese AI darling DeepSeek is reportedly nearing a $7.4bn raise backed by the likes of Tencent and Contemporary Amperex and the $8bn state-backed National Artificial Intelligence Industry Investment Fund. While Alibaba led a $293m funding round into ShengShu Technology, a Beijing-based start-up behind the Vidu AI video-generation tool. China's core AI industry - which boasts more than 6,200 companies - was valued at nearly $174bn in 2025, according to a government statement from March. While the market research firm International Data Corporation placed the Chinese AI market at some $63bn at the end of 2025, with estimates expecting it to cross $200bn by 2029. The publication reported that key Chinese agencies, including the National Development and Reform Commission, are in early discussions to create a blueprint for a network of interconnected computing hubs across the country. Details of the early stage discussions could, however, change, the sources added. The funds are reportedly expected to materialise via sovereign debt, including long term government bonds, state funds meant for investment in strategic industries, as well as bank loans and private capital. The plan forms a key part of the "six networks" program announced earlier this year, which plans the build-out of computing, water, communication, urban underground pipe and logistics networks, and power grids, said sources. Local suppliers, including Huawei, are to be tapped for at least 80pc of the required technology, such as AI chips, while state run corporations such as China Mobile and China Telecom are expected to manage a majority of the data centres. China is aggressive in its protection of home-grown technology. According to rules, state authorities need to approve the export of certain key technologies, including AI. Earlier this year, the country took action against Meta over its acquisition of the Chinese-founded AI company Manus, demanding that the US tech giant undo the deal and restore Manus's Chinese assets to their original state. Meanwhile, the US government last week moved to close a loophole that could have been aiding companies to export advanced US-made chips to subsidiaries of Chinese companies located outside China. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

China launches $295 billion drive to boost AI self-reliance

China is advancing a $295 billion artificial intelligence (AI) strategy aimed at achieving significant progress over the next five years, with a strong emphasis on domestic components. According to a report from Bloomberg, the Beijing Administration plans to utilize 80% domestic suppliers, specifically focusing on Huawei's Ascend chips, for its AI infrastructure. The initiative is designed to bolster China's AI capabilities and foster global expansion. It includes the establishment of data centers throughout the country, relying on local suppliers for the majority of technological components necessary for this infrastructure. Due to US restrictions impacting China's semiconductor industry, the nation has faced challenges in competing in the advanced AI technology sector. However, major Chinese technology companies, including Huawei, Alibaba, and Baidu, are reportedly helping accelerate the growth of China's AI industry. Huawei's Ascend chipsets have demonstrated significant advancements, positioning them as a viable alternative to Nvidia's semiconductor products. The company has outlined plans to launch a new AI chip annually over the next three years, with each iteration expected to offer double the computing power of its predecessor. Through the implementation of this strategy, China aims to decrease its reliance on foreign technology, particularly Nvidia, and focus on self-sufficiency in AI development. The country also plans to extend its support to developing nations as part of its broader goals in AI innovation.

China prepares $295 billion plan to fund nationwide AI buildout: Report

National Development and Reform Commission is ⁠among key ⁠government agencies drafting a blueprint to build a network of inter-connected computing hubs across the country, the report said, citing people familiar with the matter. China is preparing to spend around 2 trillion yuan ($295.43 billion) over the next five years on building data centers across the country, Bloomberg News reported on Tuesday, as Beijing looks to challenge the U.S. in the intensifying AI race. National Development and Reform Commission is ⁠among key ⁠government agencies drafting a blueprint to build a network of inter-connected computing hubs across the country, the report said, citing people familiar with the matter. China's new five-year policy blueprint laid out its ambitions to aggressively adopt AI throughout the world's second-biggest economy and dominate emerging technologies such as ⁠quantum computing and humanoid robots. State firms such as China Mobile and China Telecom will operate the bulk of the ⁠data centers and ensure they are connected, according to the Bloomberg News report. The idea is to rely on local suppliers, including Huawei Technologies for at least 80% of technology such as AI chips, effectively squeezing out Nvidia and Advanced Micro Devices, the report said, adding that the data-center blueprint remains in early discussions and details could change. This comes as Big Tech companies in the U.S. are expected to spend more than $700 billion this ⁠year to fund their AI buildout plans. China Mobile, China Telecom and National Development and Reform Commission did not immediately respond to Reuters' requests for comment. Reuters reported last year that the Chinese government issued guidance requiring new data center projects that have received any state funds to only use domestically made AI chips.