The Mongolian city at the heart of China’s AI ambitions

The Mongolian city of Ulanqab might not immediately stand out as one of the most important places in the global race to build artificial intelligence. It sits on the Mongolian Plateau in China's Inner Mongolia Autonomous Region, far from the technology centers clustered along the country's eastern coast and the giant data-center campuses rising across the American West. Yet despite its obscurity,  Beijing has deliberately made places like Ulanqab part of the physical infrastructure supporting China's digital economy.

 By August, more than 100 data-center projects had landed in Ulanqab, according to Science and Technology Daily, a state-run newspaper affiliated with China's Ministry of Science and Technology. The city had 172,000 “P” of operational computing capacity, the measure used by Chinese authorities, more than double the level a year earlier. Electricity consumption by its computing industry rose 89.52% in the first half of 2026.

Ulanqab's rise, while extraordinary in scale, is not simply the story of technology companies discovering cheap land and electricity. Chinese government documents show a deliberate national strategy to concentrate large computing facilities in designated hubs, connect them with the country's technology centers and coordinate their development with electricity supply. As AI turns computing capacity into a strategic resource, Ulanqab offers a glimpse of how Beijing intends to build the enormous physical system required to provide it.

Moving computing west

Ulanqab’s role in China’s computing strategy predates the current boom in generative AI. In December 2021, the National Development and Reform Commission, China's economic planning agency, together with three other central government bodies, approved Inner Mongolia as a national hub in China's integrated computing network.

The decision was unusually explicit about the region's purpose. In the December 2021 approval, Beijing instructed Inner Mongolia to take advantage of its strengths in "climate, energy and environment" to develop highly reliable, energy-efficient and low-carbon data-center clusters. It called for a low-cost integrated computing supply system and directed the region to become a "computing-power support base serving the whole country."

Ulanqab was incorporated directly into the plan through its Jining Big Data Industrial Park. The approval envisioned the cluster serving computing demand from Beijing, Tianjin and Hebei, as well as less time-sensitive workloads from regions farther away.

Beijing formally launched its wider "East Data, West Computing" project the following year, seeking to match computing demand concentrated in the east with land and energy resources farther west. An NDRC explanation published in March 2022 compared the project with China's earlier efforts to move natural gas and electricity from west to east, treating computing capacity as another resource that could be distributed across regions.

From data centers to infrastructure

In December 2023, six central government bodies issued an implementation plan declaring that "computing power is a new productive force in the era of the digital economy" and describing the computing network as "key infrastructure." The plan called for computing capacity to be developed alongside green electricity.

The geographic instructions were equally explicit. Authorities were told to "guide various computing resources to gather at national hub nodes," while new large and ultra-large data centers should, "in principle," not be constructed outside those hubs. By the end of 2025, the government wanted the designated hubs to account for more than 60% of all newly added computing capacity nationwide. Newly constructed data centers in the hubs were also supposed to obtain more than 80% of their electricity from green sources.

The plan also called for suitable workloads, including AI model training and inference and machine learning, to migrate west. A further directive in 2024 called for Inner Mongolia to become a national computing support base supplied with long-term, stable green energy.

Ulanqab offered Beijing something particularly useful within that system: abundant renewable electricity within fiber reach of China's eastern technology centers. In June 2026, Vice Mayor Gao Yongbin said the city had 20.288 gigawatts of installed renewable capacity and that green electricity accounted for 67% of its electricity mix, according to Xinhua, China's state news agency.

The energy advantage is becoming more valuable as computing consumes more electricity. Data centers used about 415 terawatt-hours globally in 2024, or 1.5% of world electricity consumption, according to the International Energy Agency's 2025 Energy and AI report, which projects their global electricity demand to more than double by 2030.

Ulanqab scales up

Ulanqab's buildout accelerated rapidly. In June 2025, the Inner Mongolia regional government said the city had signed agreements for 66 large computing-center projects and exceeded 71,000 P of computing capacity. A year later, Ulanqab reported 89 signed projects and 165,000 P of operational capacity, including 65,000 P handling computing demand from Beijing, according to figures reported by Xinhua. Two dedicated 144-core fiber-optic links connected the city directly to the capital.

By August, Science and Technology Daily reported more than 100 data-center projects and 172,000 P of operational capacity, up 112% year on year. Signed projects collectively represented more than five million "standard racks," a measure of contracted rather than operational capacity.

The physical demands behind those numbers are substantial, requiring not only chips but electricity, cooling and fiber networks in a country that the International Energy Agency expects to account for nearly half of the increase in global electricity demand through 2030.

Building a national computing network

Ulanqab sits inside a project considerably larger than the city itself. China has designated eight national computing hubs, five of them in western regions, while expanding the fiber infrastructure needed to connect computing capacity in the west with technology companies and other users concentrated farther east, according to a June 2026 account published by Digital China, an official platform affiliated with China's annual government-backed Digital China Summit. The account described an eventual national system in which computing power could be accessed much like water or electricity.

In September, National Data Administration director Liu Liehong traveled to Inner Mongolia, visiting Huawei Cloud and a low-carbon data center in Ulanqab. His agency said the region was seeking to turn its combined energy and computing advantages into economic value.

Liu's visit underscored how far that project has advanced. Beijing's answer to the enormous physical demands of AI is not simply to build more data centers, but to decide where computing should be concentrated, where its electricity should come from and how it should reach users elsewhere in the country. Ulanqab is what that strategy looks like on the ground.