U.S. tech giants are once again in the sights of the Chinese government as it launched a $37 billion plan to build a huge “mega-cluster” of AI data centers in the country.
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U.S. Challenge
According to a report in the Financial Times, China is launching a project dubbed, by one of the project’s suppliers, the “Stargate of China.” It will be located on a 760-acre island in the Yangtze River, near to economic hubs such as Shanghai, and focus on beefing up the country’s AI computing resources, enhance AI inference and training capacities, and of course directly challenge U.S. data center expansion.
It is understood that major Chinese tech companies such as Huawei and China Mobile will be involved in the new venture.
The plan is part of China’s AI Industry Development Action Plan to support AI infrastructure as China looks to keep pace and compete with the U.S. in the evolving sector.
Chinese Ambitions
The U.S., according to a report from Epoch AI, has around 75% of global AI computing capacity, with China currently having around 15%. China wants that to change and has the backing of the state and President Xi behind it to push up its numbers.
That’s because AI isn’t just about fancy tech or developing the economy, it is also a fundamental part of current and future defense technology.
The U.S. will continue to fight its corner. Its own Stargate project is a large-scale data center and AI infrastructure initiative backed by OpenAI, Oracle (ORCL) and SoftBank (SFTBY).
It is partly why Oracle’s share price has performed so well this year – see below – although, it is down today in early trading.
Launched in January 2025, the Stargate Project plans to invest up to $100 billion in data center infrastructure during its initial phase, with an aim to invest a total of $500 billion over the next four years. Construction is already underway on the first data center plant in Abilene, Texas. It is looking at 16 other states as potential sites for future buildings.
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