Reports indicate that China’s artificial intelligence (AI) sector has ambitious plans to construct a “hyperscale”facility that will utilize more than 100, 000 NVIDIA AI chips.
China’s AI Firms Aim to Establish 36 New Data Centers Utilizing NVIDIA’s H100 & H200 AI Chips
As countries worldwide vie for supremacy in AI infrastructure, China is intensifying its efforts to secure a competitive edge, undeterred by prevailing trade restrictions. A recent Bloomberg report has revealed that, with governmental backing, several Chinese AI companies plan to build a massive AI facility in Yiwu. According to official documents and tenders, they intend to install over 115, 000 NVIDIA’s advanced AI chips across 36 data centers located primarily in the country’s western deserts. The pivotal question remains: How will Beijing navigate the current U. S.restrictions to acquire the necessary computing power?
While the proposals are still in the formative stages, this project represents one of the most significant expansions of AI data center capabilities in China, highlighting the substantial volume of chips intended for deployment across various sites. Although it currently doesn’t match the capabilities of U. S.infrastructure, the initiative indicates that Beijing is committed to advancing its AI ambitions by any means at its disposal. Notably, when Bloomberg inquired about the developments of these data centers, U. S.sources appeared unaware, suggesting that the project may be confidential or still under consideration.
This raises the question of how China intends to source the requisite chips if barred from U. S.supply. Speculations suggest that China may look towards Southeast Asian nations like Malaysia and Singapore, rumored to have provided Chinese engineers with access to AI chip resources. Additionally, Chinese major technology firms possess a significant inventory of H2O AI accelerators, which they could utilize in the construction of these data centers. However, a reliable supply of NVIDIA AI chips remains elusive, compounding the challenge for China’s data ambitions.
Although concrete evidence of Chinese AI companies acquiring such a vast number of chips is lacking, ongoing developments in Yiwu indicate progress. Despite the existing barriers, China’s data center market is evolving rapidly and is projected to reach a valuation of approximately 300 billion yuan this year. Interestingly, the country has not fully pivoted to domestic alternatives, such as those offered by Huawei, for its hyperscale needs. Instead, it seems to be navigating through what could be termed “trade loopholes, ”suggesting that U. S.export controls are not entirely effective at this time.
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