China's 'potato capital' cultivates new crop of data centres as AI boom takes root

In the arid plains of Inner Mongolia, China's potato capital is undergoing a transformation as it becomes a hub for artificial intelligence (AI) data centres. Ulanqab, a city in Inner Mongolia, is witnessing a shift from traditional farming to high-tech industry as AI boom takes root.

Zhang Zhiyong, a 64-year-old farmer, once relied on his land to grow potatoes, which was the only source of livelihood for his family. However, his land is now being taken over by data centres as part of a construction boom in the city. Despite receiving compensation of over 200,000 yuan (USD 30,000) for his land, Zhang is determined to continue working as long as he can.

Ulanqab, previously known for its potato production, is now home to more than 4 million tonnes of annual potato output, accounting for nearly 5% of China's total. The city is actively participating in China's national network of computing hubs, with AI-focused computing accounting for more than 90% of the city's total computing capacity.

The city's rise as a computing hub is driven by a combination of national policy, geography, and climate. Inner Mongolia's abundant wind and solar resources, coupled with its relatively cool climate, make it an ideal location for data centres. President Xi Jinping recently visited Ulanqab's Chahar High-Tech Development Zone, a major data centre hub, and called for closer coordination between computing, electricity, and water resources.

However, the rapid expansion of the city as a computing hub raises concerns about water sustainability in a region already prone to drought. Local residents, who have experienced water scarcity for decades, are worried about the additional water demands posed by the growing data centre industry.