AI computing and data center development in Ulanqab

Ulanqab, located in China’s Inner Mongolia Autonomous Region, has developed into a major hub for artificial intelligence computing and data center infrastructure. The region’s growth is driven by its low temperatures and abundant wind and solar energy, which support the national ‘East Data, West Computing’ strategy by providing green electricity at costs 30% to 40% lower than eastern coastal provinces.

Development includes the launch of China’s largest AI industrial park, anchored by Envision Group’s Galaxy Campus, which is designed to house up to 1 million AI accelerators. The region has attracted 89 data center projects from major technology firms, including Alibaba, Huawei, Tencent, Baidu, ByteDance, and Kuaishou, with total investments exceeding 500 billion yuan. This industrial surge contributed to a 53% increase in Ulanqab’s GDP between 2020 and 2025.

Despite the economic expansion, the rapid growth of data centers has raised environmental concerns. The high electricity and water requirements for cooling systems pose risks to local water security, particularly as the region’s per capita water resources are less than one-fourth of the national average. There are warnings that these operations could exacerbate droughts and create tension with local herders.