Inner Mongolia’s Ulanqab is becoming one of the fastest-expanding regions for AI data centers in China. According to reports citing Goldman Sachs data, local authorities have secured capacity commitments totaling 12.5 GW from data center operators, internet companies, and AI firms as of June 2026, a significant increase from 3.3 GW in July 2025.
Low latency and low electricity costs attract computing power aggregation.
The key conditions behind this expansion are the location near Beijing, lower electricity prices, and a higher proportion of green energy supply. Ulanqab is approximately 240 kilometers from Beijing, with an optical fiber round-trip latency of about 4.2 milliseconds, enabling it to meet the computing demands of the Beijing-Tianjin-Hebei region.
Meanwhile, local new energy installed capacity has exceeded 20 GW, with a high proportion of green electricity, resulting in data center end-user electricity prices of approximately RMB 0.33 to 0.36 per kWh—lower than in most areas of the Beijing-Tianjin-Hebei region. The average annual temperature of about 4.3°C also enables the region to leverage natural cooling for much of the year, reducing cooling costs.
Electricity consumption and computing power data rise in tandem.
Demand-side data also shows rapid expansion. In 2025, the utilization rate of Ulanqab data center capacity increased by over 70% year-over-year, reaching approximately 800 MW; by June 2026, online computing power reached 165 EFLOPS, more than doubling year-over-year.
In the first half of 2026, local data center electricity consumption increased by 90% year-over-year to 3.3 TWh, accounting for 7% of the city’s total electricity usage. This indicates that new projects are no longer just at the planning stage, and the operational intensity of existing data centers is also rising.
Green power direct supply has become a priority for new projects.
Unlike traditional IDCs, which primarily rely on public power grids, Ulanqab is promoting a "green power direct connection" model. Some companies are directly powering their data centers by building their own wind farms, dedicated transmission lines, and energy storage systems, reducing dependence on the public grid and increasing the proportion of green energy used.
The report mentions that Envision Group's "Milky Way Base" in Ulanqab, with a planned capacity of 2 GW, aims to build large-scale parallel computing power. Such projects do more than provide data centers—they integrate energy supply, energy storage, and data center infrastructure into a unified development approach to address the highly variable power demands of AI training and inference.
Large-scale delivery or after 2028
However, production commitments do not equate to immediate full implementation. The report notes that China does not suffer from a general electricity shortage, but certain regions still need to accelerate the construction of supporting infrastructure such as transmission lines, substations, and energy storage. After data centers are concentratedly deployed, the pressure on regional power grids will rise significantly, which may also affect the speed of project delivery.
Goldman Sachs expects China's online data center capacity to increase from 28 GW in 2025 to 53 GW by 2030. For comparison, the currently committed 12.5 GW of capacity in Ulanqab is approximately three times that of Johor, Malaysia. However, the report also notes that significant capacity release in the region may not occur until after 2028.