China's Secretive AI Plans Unveiled in Xinjiang Desert Data Centers

China plans to buy over 115,000 Nvidia chips for data centers in Xinjiang, despite US export bans. This could aid China's AI master plan. The chips will power data centers for training AI models, with Bloomberg analyzing investor and tax documents and company filings.

China is in the midst of a significant expansion of its data center infrastructure in the western deserts of Xinjiang, with a focus on equipping these facilities with advanced AI chips from Nvidia Corp. According to Bloomberg News, the plan involves installing more than 115,000 Nvidia AI chips in approximately three dozen data centers across the region [1].

The construction of these data centers is part of China's broader ambitions to lead the world in artificial intelligence. The facilities are intended to train foundational large-language models, similar to those developed by Chinese AI startups like DeepSeek. The primary site for this ambitious project is Yiwu, a modest county in Xinjiang, which is being transformed into a hub for AI computing power [1].

Despite the US government's restrictions on exporting leading-edge Nvidia chips to China, the country appears to be pushing ahead with its plans. The Chinese government and various companies have been silent on how they intend to acquire these restricted chips. Bloomberg News analyzed investment approvals, tender documents, and company filings to uncover the extent of the planned expansion [1].

The US Commerce Department, which enforces chip trade restrictions, has not provided detailed information on the number of restricted Nvidia chips currently in China. However, some officials have estimated that there are around 25,000 such chips in the country, which would not significantly impact the US's strategic interests [1].

Nvidia, in a statement, noted that "posting a web page asking about restricted products is not the same as successfully licensing, building, and operating a datacenter." The company also highlighted that "trying to cobble together a datacenter from smuggled, previous-generation products makes no business or engineering sense" [1].

The construction of these data centers in Xinjiang is being driven by the region's abundant renewable energy resources, including wind and solar power, which provide a cost-effective and sustainable source of energy for the facilities. The project also underscores China's strategic interest in leveraging its vast energy resources to meet the growing demand for AI computing power in more economically developed regions [1].

While the US has expressed concerns about China's access to advanced AI chips, the ongoing construction in Xinjiang suggests that China is determined to pursue its AI ambitions, potentially through alternative means. The implications of this expansion for geopolitical tensions and technological competition remain to be seen [1].

References:
[1] https://www.bloomberg.com/graphics/2025-china-data-centers-nvidia-chips/