China’s ambitions in artificial intelligence are reaching a new scale: a mega project in the western desert would include over 115,000 AI accelerators, challenging restrictions imposed by Washington.
China aims to accelerate in the global race for AI leadership. According to an exclusive from Bloomberg, a consortium of tech companies in the country—backed by the state—plans to build one of the largest AI infrastructure deployments ever announced in the country, with more than 100,000 NVIDIA chips installed across 36 data centers spread throughout the western Chinese deserts.
The project, centered in the city of Yiwu, represents a colossal investment and reflects Beijing’s strategic interest in strengthening its computing capabilities to train next-generation AI models. But it also raises a critical question: how does China plan to acquire these chips if they are under strict export restrictions by the U.S.?
U.S. Chips Amid the Ban
Since October 2022, the U.S. government has imposed strict controls on the export of advanced chips like NVIDIA’s H100 and H200 GPUs to China, citing national security risks. However, procurement documents reviewed by Bloomberg suggest these GPUs remain crucial to Chinese plans.
How is this possible? Hypotheses point to indirect acquisition channels, including partners in Southeast Asian countries like Malaysia or Singapore, where Chinese engineers could access this hardware. Additionally, China holds a large stock of H20 accelerators, a limited variant of the H100 designed by NVIDIA for the Chinese market, though its performance is significantly lower.
A New Breach in Export Control?
This mega project reveals a crack in the effectiveness of U.S. technological restrictions. In the absence of a stable supply of cutting-edge chips, Chinese companies seem to be exploiting regulatory loopholes, commercial triangulations, and existing reserves to advance their expansion plans.
While U.S. sources consulted by Bloomberg claimed no knowledge of the Yiwu project, this only underscores its confidentiality and sensitivity. Some analysts suggest such moves might be in planning phases or early development stages, with low media profile to avoid triggering new bans.
China’s Data Center Market in Full Boom
Beyond technological limitations, China’s data center market continues to grow rapidly. It’s estimated to reach a value of 300 billion yuan (roughly 38 billion euros) this year. Contrary to expectations, Chinese firms have not yet massively migrated to domestically produced solutions, such as Huawei’s Ascend chips, for large-scale AI workloads.
The reason: domestic solutions still do not match the performance of NVIDIA chips, forcing many companies to depend on foreign hardware—even if it means navigating restrictions.
A Geopolitical Game on a Silicon Board
The ambitious plan with 36 data centers underscores that, in the AI supremacy race, rules are murky, and shortcuts abound. While the U.S. tightens measures to curb Chinese technological advances, Beijing’s tech giants find ways to grow, with a clear goal: not to fall behind in the AI era.
via: wccftech