Chinese tech giant Alibaba has partnered with China Telecom to launch a major new artificial intelligence (AI) data center in southern China, marking a significant step in the country’s drive to build self-sufficient technology infrastructure.
The facility, announced on Tuesday, is located in Shaoguan, Guangdong province, and is powered by 10,000 of Alibaba’s in-house developed Zhenwu AI chips. These semiconductors are designed for both AI training and inference tasks, enabling the system to handle extremely large AI models with hundreds of billions of parameters.
The scale of the project highlights China’s growing ambition to compete globally in advanced AI capabilities while reducing reliance on foreign semiconductor technology. Over recent years, restrictions imposed by the United States on exports of advanced chips—particularly those from companies like Nvidia—have accelerated Beijing’s push to develop domestic alternatives.
Alibaba has been investing heavily in chip design through its T-Head semiconductor division, as part of a broader strategy to control key layers of the AI ecosystem. The company is not only building chips but also operating data centers and developing proprietary AI models, which are offered through its rapidly growing cloud computing business.
The new data center is expected to expand significantly, with plans to scale up to 100,000 chips in the future. This would place it among the largest AI computing clusters globally and further strengthen China’s domestic AI infrastructure.
Chinese firms are taking a distinct approach compared to their U.S. counterparts. While American technology companies are projected to spend around $700 billion this year on AI development, Chinese companies are focusing on more targeted investments. Their strategy prioritizes practical applications in sectors such as healthcare, manufacturing, and advanced materials—areas expected to deliver measurable economic returns.
The launch also follows the recent deployment of a large computing cluster powered by Huawei’s Ascend 910C chips, signaling intensifying competition within China’s own tech ecosystem to build high-performance AI systems using locally developed hardware.
The Shaoguan facility is expected to support a wide range of industries, from medical research to industrial innovation, reinforcing China’s long-term objective of becoming a global leader in artificial intelligence while maintaining technological independence.
