China Unveils $295 Billion AI Data Center Grid Plan for 2028

China plans to spend roughly 2 trillion yuan ($295 billion) over five years on a nationwide AI data center grid, according to Bloomberg. The National Development and Reform Commission drafted the plan to centralize computing power across state carriers like China Mobile and China Telecom by 2028.

State carriers will centralize computing infrastructure using mostly domestic silicon by the end of the decade

The infrastructure project requires at least 80% of underlying technology, including AI chips, to come from domestic suppliers such as Huawei. State carriers will operate the facilities and link them into a single computing grid within the current timeline.

SMIC's N+2 manufacturing process and high-bandwidth memory shortages pose major challenges for meeting these targets. Chinese chip executives have separately conceded that the country trails the leading edge in AI data center silicon by five to 10 years.

Domestic suppliers will likely cover only around 76% of all Chinese AI chip demand by 2030, based on current production limits and supply chain constraints. The market for these chips is projected to grow toward $67 billion during that period.

The plan relies heavily on sovereign debt and ultra-long special government bonds to fund the massive infrastructure buildout. China has also tightened restrictions on foreign silicon by banning Nvidia, AMD, and Intel parts from state-funded projects.

This initiative marks a major shift in how China approaches AI hardware procurement and domestic semiconductor supply chains. The project aims to reduce reliance on foreign technology while building out critical computing infrastructure.