Ulanqab in Inner Mongolia is scaling up as a major AI data center hub, with nearly 90 facilities planned in a region under two million residents.
Backed by companies like Huawei and VNET, the area leverages its cold climate, innovative cooling methods, and proximity to Beijing to build out heavy digital infrastructure.
Despite this enormous mobility, the United States maintains a significant lead in the field of artificial intelligence. According to a study by Stanford University, the US had about ten times as many data centers as of last year, while American companies’ investments remain many times higher than those of China. In addition, American export restrictions deprive China of access to advanced chips, forcing domestic manufacturers to rely on less sophisticated components and combine multiple arrays to meet their needs.
To compensate for the gaps in capital and advanced equipment, China is leveraging its own strengths: speed of construction, availability of cheap land and, most importantly, a huge amount of surplus green energy from renewable sources, which more than covers domestic needs in contrast to the strained American power grid. In addition, Ulanqab’s cold climate and the use of cooling systems with industrial alcohol instead of water significantly limit the environmental footprint of the facilities. Thanks to its proximity of 320 kilometers from Beijing and its fast connection via fiber optic cables, the region is becoming a key pillar of China’s AI strategy, although challenges remain, such as the distance of some nodes from major urban centers and the risk of creating low-demand infrastructure.
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