China monetizes computing power via tokens

BEIJING — Behind every artificial intelligence breakthrough lies raw computing power. China, staying true to its characteristically pragmatic approach, is now racing to industrialize it.

Recent developments offer a striking glimpse of this trend. In Jiangsu province's Wuxi — a manufacturing powerhouse near Shanghai — electronics firm HON-Flex signed an agreement with the local government to build what they call a "token factory". Days later, China Telecom and China Mobile, the country's two telecom giants, began selling "token packages" directly to consumers, with entry-level plans starting at just 9.9 yuan ($1.46) a month.

The ambition runs deeper than merely expanding data centers and stockpiling AI accelerators. China is methodically converting computing power into measurable and priceable commodities — much like water, electricity or bandwidth. By leveraging the vast subscriber networks of traditional telecom operators that already reach billions of users, this push is poised to accelerate AI services into the marketplace.

Wuxi is helping serve as the physical anchor for this shift. HON-Flex has declared it will build a large-scale, high-performance supernode computing cluster in the city, powered by domestic chips and models.

This industrial-scale facility, which is built on AI accelerator clusters and combines power supply, liquid cooling systems, high-speed networks and large model inference optimization technologies, is intended to mass-produce AI tokens, the fundamental units of large language model output.

The "token factory" will initially deploy four Huawei Ascend 384 supernode servers, each packing the computing power of Ascend 384 AI accelerator cards.

The bureau of science, technology, industry and information technology of Wuxi National High-tech District said the new "token factory" will directly provide low-cost and high-efficiency intelligent computing power services to AI enterprises in Wuxi and the broader Yangtze River Delta region. Meanwhile, it will drive the agglomeration of chip adaptation businesses, model optimization industries and industrial application sectors in the city.

The project utilizes green power generated in Northwest China's Qinghai province, with an abundance of solar and wind power. Integrating basic clean energy-powered computing resources transmitted from the province to the supernode cluster in Wuxi, the project will convert raw "computing power" into standardized "tokens" that can be directly utilized by AI applications.

This approach makes full use of low-cost western green energy to reduce token production costs while ensuring consistent computing service provision.