China prepares $295 billion plan to fund nationwide AI bu…

China plans to invest approximately 2 trillion yuan (about $295 billion) over the next five years to establish a network of interconnected data centers nationwide, aiming to enhance its AI capabilities and compete with the U.S. This initiative is driven by the National Development and Reform Commission and involves state firms like China Mobile and China Telecom managing most of the data centers. The country's new policy aims to prioritize local technology suppliers for AI chip production, potentially limiting imports from companies like Nvidia and AMD. The blueprint is in early discussions and may undergo changes.

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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

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