Chinese AI companies plan new facility in China with 115,000 NVIDIA AI GPUs, even with chip ban

Chinese AI companies want to secure 115,000 NVIDIA AI GPUs to power new data centers in the desert, in the middle of US export restrictions stopping high-end AI chips from entering China.

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In a new report from Bloomberg, we're hearing that futuristic structures are data centers that Chinese AI companies want to equip with high-end American semiconductors, chips that the US government doesn't want China to obtain. Bloomberg News has analyzed investment approvals, tender documents, and company filings that show Chinese AI companies aim to install over 115,000 of NVIDIA's high-end AI GPUs.

The companies want to install the AI chips in over 36 data centers across China's western deserts, with operators in Xinjiang planning to house most of the AI chips in a single compound, which, if achieved, could be used to train foundational LLMs (large language models) like those of Chinese AI startup DeepSeek.

Even with this huge installation of AI chips, the US would still lead the world with AI computing power, but Chinese President Xi Jinping is continuing to push for technological breakthroughs for China. The project would raise serious concerns for Washington, which has been restricting the bleeding-edge AI chips from NVIDIA entering China, worried that it would provide the country with a military edge.

There's no explanation as to how China would acquire the high-end NVIDIA AI GPUs, which can't be purchased without licenses provided from the US government, permits that China hasn't been given. Bloomberg News spoke with over a dozen people who have been involved in or privy to US government investigations into the matter, as well as several people with direct knowledge of the black market in China.

Bloomberg News reports that none of those familiar with the US probes said they previously knew about the data center buildout in Xinjiang. All of the sources said that while they believe there are indeed banned chips in China, they weren't aware of an illegal trade network that's sophisticated enough to secure 100,000 high-end AI GPUs and direct that hardware into a centralized location.

NVIDIA said in a statement over email regarding questions about the Chinese AI companies' claims: "Posting a web page asking about restricted products is not the same as successfully licensing, building, and operating a datacenter. Datacenters are massive and complex systems, making smuggling extremely difficult, and we do not provide any support or repairs for restricted products".

Bloomberg adds that even though no one has any idea how these Chinese AI companies would get their hands on high-end NVIDIA AI GPUs, construction on the data centers in Yiwu continues. The huge structure in the deserts of China is the height of the Golden Gate Bridge, radiating an intense light that "pierces the surrounding dust clouds". Arrays of reflectors focus the sun's energy into a received that allows the daytime heat of the arid plains to be stored, ensuring continuous power generation.

This is one of the main reasons as to why the Chinese AI companies chose Yiwu, just to the south over a mountain pass. Bloomberg adds that on the barren hill behind one of the new buildings stands a wall with a slogan picked out in red Chinese letters two meters high that reads: "data-electricity fusion shows great promise".