China shifting massive AI data center complexes to rural provinces to tap surplus energy — ‘Eastern Data, Western Computing’ strategy has Chinese tech giants Huawei and Tencent building AI infrastructure Guizhou
Beijing has been encouraging its tech giants to build data centers across the country as the central government believes that computing power, especially in the age of AI, correlates to national power. Because of this, many Chinese companies like Huawei and Tencent have been actively building AI infrastructure in rural provinces, like Guizhou province, which is located more than 500 miles to the northwest of Shenzhen. According to Tech Xplore, dozens of these facilities have been constructed in the area in recent years, with more on the way.
Unlike the U.S., where data centers face increasingly tough opposition, these build-outs are seemingly approved with relative ease, and the people living around them apparently appreciate the changes that the data centers and related infrastructure brought to the area. “It used to be a barren mountain, but since the area has developed, transportation has become more convenient, trade has picked up, business opportunities have emerged,” one shopkeeper told the publication. Another local, Li Xixiu, praised the development of the main road as tech companies entered the area, saying that it “boosted the economy of the area,” and that there have been more local opportunities since then. “All the villagers in our neighborhood now find jobs nearby, unlike before, when they had to go to other places,” said Li. Still, it must be noted that Beijing places tight control on objections and protests, and that ordinary people cannot just object to policies set by the central government.
One of the reasons behind American opposition to data centers is the egregious electricity price increases they’ve brought on the average user. The PJM Interconnection region, the biggest power region in the United States, has seen a massive 76% increase in electrical costs because of the burden that data centers have put on the grid. Aside from that, it’s estimated that 20% of power generated in the U.S., amounting to 194GW, will be allocated to data centers by 2035. By comparison, analysts say China has a massive advantage in power generation, with several western Chinese provinces offering steep discounts on their electricity bills for AI companies that use Chinese chips. Furthermore, because the state subsidizes the power costs of residential and agricultural users, the average citizen does not worry that a nearby data center would cause their utility costs to increase.
These rural provinces also have large swaths of land allocated for renewable energy production, with energy overproduction becoming a problem for some operators. So, the construction of these power-hungry buildings actually helps solve the problem by using up surplus power instead of letting it go to waste. The availability of land and power in these western provinces makes it more attractive and affordable to put up data centers, compared to areas east of the country which are largely built up and have higher population concentrations.
Still, this development is not without issue. The Research Institute for Democracy, Society, and Emerging Technology (DSET) in Taiwan said in an email to AFP that while Guizhou has seen an average GDP growth of 7.4% over the past 10 years, wages didn’t increase as much and lagged behind much of the rest of the nation. “This contrast suggests that while data centers drive heavy investment in land and equipment, their impact on boosting local per capita income remains limited,” DSET researchers Cartus Bo-Xiang You and Angela Glowacki wrote.
