Ulaanqab seen as hub for mega AI data centers

China's Envision Group has completed construction of what it calls the world's largest single-unit artificial intelligence computing facility in Ulaanqab, Inner Mongolia autonomous region.

The project highlights a broader race in China to build massive AI data centers capable of supporting the next generation of AI models while addressing soaring electricity demand.

The race for AI computing is also drawing attention to Ulaanqab. As Bloomberg reported that Chinese AI startup DeepSeek was considering building a large AI data center in Ulaanqab with a power capacity of around 1 gigawatt, several sources told China Daily that DeepSeek has been in discussions with local authorities in Ulaanqab over potential cooperation.

But the two sides have not committed to such an AI data center. Instead, the AI company is currently using computing equipment leased from local providers, with the scale of those rentals remaining limited, sources said.

For Envision, it features a 120,000-square-meter facility in Ulaanqab — equivalent to about 20 standard soccer fields — with the ability to run 1 million AI chips in parallel and deliver computing capacity of at least 1 million petaflops, or PFlops, according to the company.

The facility has been designed as one of the world's most powerful "token factories", a term increasingly used in the AI industry to describe infrastructure dedicated to producing the digital building blocks generated by large language models.

Zheng Zihao, general manager of Envision Group's AIDC business, said: "China's chips are pursuing a breakthrough through large-scale cluster deployment. Envision's super-scale AI data center can serve as a strong backbone for this 'army', providing massive deployment capacity, reliable power reserves and efficient energy supply channels."

The move is part of a larger initiative announced by Envision in June, which aims to build 5 GW of green AI computing centers across desert regions worldwide by 2030.

The company said the Ulaanqab project is the first step of that plan, targeting growing demand from leading technology companies for large-scale domestic AI computing capacity and seeking to create a China-developed model combining renewable energy with AI infrastructure.

Ulaanqab has emerged as one of China's strategic AI computing hubs. It has already attracted 89 data center projects, with contracted capacity exceeding 5 million standard racks.

The city is also building one of China's first green computing ecosystems. The Ulaanqab data center cluster has launched a renewable energy direct supply project integrating power generation, grid connection, energy consumption and storage, including 300 megawatts of wind and solar power capacity and 45 MW of energy storage.

In fact, Inner Mongolia is rapidly positioning itself as a global-scale AI computing center cluster. Major technology companies including Huawei, Tencent and Alibaba; telecom operators China Mobile, China Telecom and China Unicom; as well as financial institutions such as Agricultural Bank of China, have established computing facilities in the region.

Chinese AI startups, including Moonshot AI and DeepSeek, are training models on servers in Inner Mongolia, while energy giant Sinopec is developing its industrial large language model there. Electric vehicle makers such as XPeng are also using regional computing resources to train autonomous driving algorithms.

Xu Zhifa, head of industrial and planning at the China Academy of Information and Communications Technology, said: "Inner Mongolia has a unique combination of advantages for developing green computing. Abundant clean energy and lower electricity prices significantly reduce operating costs for large-scale intelligent computing facilities, providing a sustainable foundation for national-level green computing clusters."

Contact the writers at chengyu@chinadaily.com.cn