China Unicom Opens US$390m Qinghai AI Data Centre
China Unicom has confirmed the launch of a new large-scale data centre in Xining, Qinghai province, representing a significant step in the country’s efforts to align telecommunications infrastructure with domestic technology development.
Announced on state broadcaster CCTV and reported by Reuters, the facility has been described as “massive” and is backed by an investment of around US$390m.
The project is being positioned as a showcase for China’s national drive to accelerate artificial intelligence (AI) and high-performance computing (HPC) through adopting home-grown processors and systems.
According to reports, the facility currently runs on 23,000 AI chips manufactured by Chinese firms, delivering 3,579 petaflops of computing capacity.
Once fully operational, the data centre is expected to provide 20,000 petaflops.
For context, one petaflop represents one quadrillion floating-point operations per second, a key metric for advanced computing workloads.
Domestic chips at the core
A central feature of the facility is its reliance on domestically produced chips rather than foreign-manufactured semiconductors.
The strategy reflects Beijing’s broader ambition to minimise exposure to international supply chain risks.
The majority of processors deployed in the centre originate from Alibaba’s semiconductor arm, T-Head, which accounts for approximately 72% of the total.
Additional contributions come from MetaX, Biren Tech and Zhonghao Xinying.
Future upgrades aim to incorporate processors from Tecorigin, Moore Threads and Enflame, broadening the domestic supplier base.
China Unicom, alongside Alibaba, Biren, MetaX, Enflame, Tecorigin and Zhonghao Xinying, declined to comment on the development when approached by Reuters.
Moreover, technical details such as the facility’s floor space, power capacity and whether the performance figures are calculated in FP64 or FP8 precision remain undisclosed.
Policy drivers supporting local adoption
Industry analysts note that the development closely aligns with China’s policy to increase the use of locally produced hardware in state-owned infrastructure.
In August, the Chinese government introduced a directive requiring publicly operated data centres to procure more than 50% of their chips from domestic manufacturers.
The directive comes against the backdrop of ongoing trade restrictions, with reports that Chinese regulators have prohibited the country’s largest technology firms from purchasing Nvidia’s AI processors.
Nvidia hardware has been widely deployed in AI systems globally, but is now subject to heightened export controls between Washington and Beijing.
Observers suggest that the launch of the Qinghai data centre not only enhances China Unicom’s infrastructure footprint but illustrates a wider national strategy that links telecoms growth with the expansion of the local semiconductor ecosystem.
Alibaba expands chip development programme
Alibaba is playing a pivotal role in the Xining facility’s supply chain.
Earlier this month, it disclosed progress on a new AI inferencing chip currently in testing and manufactured domestically.
Market specialists view this as evidence of Alibaba’s increasing involvement in the chip design and production process, positioning it as a central supplier for Chinese cloud and telecoms operators.
The initiative aligns with government priorities to strengthen domestic capabilities in AI-focused semiconductors.
Scaling for AI and HPC demand
Industry commentators highlight that China Unicom’s investment reflects broader demand for AI and HPC resources across the telecommunications sector.
By committing to a facility designed to scale up to 20,000 petaflops, the operator demonstrates how telecoms infrastructure is evolving to support intensive computing workloads while reducing reliance on imported technology.
The project’s focus on a wide range of domestic chip suppliers suggests that China is not only seeking to strengthen its immediate computing capacity but also providing a testing ground for its developing semiconductor sector.
For telecoms peers and infrastructure providers globally, the launch signals how tightly policy, investment and innovation are being woven into China’s long-term strategy for digital and AI leadership.
