The Next US-China AI Battle Is Over Compute — and China Is Spending Big

The Next US-China AI Battle Is Over Compute — and China Is Spending Big Welcome to Bloomberg’s AI Today newsletter. Every weekday we’ll break down artificial intelligence’s threats and opportunities for businesses, workers, finance and economies. Sign up now if you’re not already on the list. China’s latest plan to gain the edge in AI is a $295 billion, five-year project to connect data centers across the country. That expenditure pits the Asian nation against the US, where construction spending on data centers surpassed $50 billion in April alone. The US leads globally in terms of data center construction and capacity, but China is trying to disrupt that through centralized force of will. The AI infrastructure race in the US is driven by private-sector titans such as Microsoft, Amazon, Alphabet and Meta. In China, the state is trying to build a national compute backbone financed by sovereign debt and state-backed funds and supplied by domestic champions. It’s got to take a creative approach. Export controls mean China can’t build using cutting-edge chips from Nvidia and AMD. The country plans to rely on homegrown tech firms like Huawei and pool scattered computing resources into a unified national network, allowing users to tap available compute wherever it sits. That way, servers won’t sit idle in the deserts of Inner Mongolia or the valleys in Guizhou. The system would work much like a smart grid, routing power to the demand.