China to Allocate 2 Trillion Yuan for National AI Computing Network

According to Beating Monitor, insiders have disclosed that China plans to invest approximately RMB 2 trillion (about $295 billion) over the next five years to build a nationwide data center network aimed at boosting the domestic AI industry and surpassing the United States in key technological competitions. Core government agencies, including the National Development and Reform Commission, are leading the drafting of a blueprint for a computing power network that will connect dispersed computing resources across regions. State-owned telecom giants such as China Mobile and China Telecom will be responsible for operating and interconnecting most data centers to ensure the network is fully integrated by 2028. When combined with supporting projects such as power grid upgrades, the total investment for the entire initiative is expected to reach RMB 5 trillion. In terms of hardware and software procurement, the blueprint proposes that at least 80% of AI chips and other technical equipment must be sourced from domestic suppliers such as Huawei, further reducing the market share of U.S. chip giants like NVIDIA and AMD in China. Although the United States has agreed to allow sales of the previous-generation H200 chips to Chinese buyers, actual shipments have not yet begun due to growing confidence in domestic alternatives. In May this year, nine domestic AI chips—including those from Huawei, Alibaba, Biren Technology, and Moore Threads—passed security assessments by national technology safety authorities, clearing the way for widespread deployment of Chinese-made chips in high-security sectors such as finance, healthcare, manufacturing, and logistics. The computing power network initiative has been incorporated into China’s “Six Major Networks” national strategy, announced earlier this year, which encompasses infrastructure development in water resources, power, and computing. Funding will primarily come from the issuance of ultra-long-term special government bonds with maturities exceeding 10 years and from a national strategic industry investment fund, supplemented by bank loans and private capital. Although the total budget of RMB 2 trillion remains below the AI capital expenditures of U.S. giants like Meta and Microsoft—estimated at around $725 billion for this year alone—China’s cost advantages in labor, construction, and components, combined with local government subsidies, ensure that this budget translates into substantial real-world computing capacity.