China goes rural with data centres in quest to power AI

In China's Guizhou province, a cluster of European-style buildings featuring a clock tower and multi-arched bridge hums continuously, signaling its role as Huawei's largest data center. This cluster is part of a government strategy to establish digital infrastructure for AI development in China's less populated, rural western regions. China aims to nearly double its data center capacity within the next five years, driven by the global tech race and the need to prevent a computing crunch that could hinder AI expansion.

The construction of these data centers has transformed places like Guian New Area from barren mountains to thriving communities. With improved transportation, increased trade, and emerging business opportunities, local shopkeepers and residents have benefited from the influx of workers. Despite some concerns about energy prices and environmental issues, residents are generally positive about the changes brought by the data centers.

China's strategy, dubbed "Eastern Data Western Computing," focuses on constructing data centers in cooler climates with abundant renewable energy sources. Regions like Guizhou and Inner Mongolia, with their massive renewable energy capacity, are ideal for meeting China's goal of having data centers draw 80% of their power from renewables by the end of this decade. These data centers can also help absorb surplus renewable energy, solving the issue of curtailment.

However, researchers question whether data centers bring significant economic gains to the host regions. While Guizhou has seen an average annual GDP growth rate of 7.4% over the past decade, wage growth has been relatively low compared to the national average. The debt burden in Guizhou has also increased due to massive infrastructure investment and policy incentives for data center builders. Nevertheless, the demand for data processing capacity continues to grow, ensuring the expansion of data centers in China.