China’s core AI industry – which boasts more than 6,200 companies – was valued at nearly $174bn in 2025.

China is planning to spend around $295bn – or 2trn yuan – over the next five years to build data centres across the country, Bloomberg has reported, citing sources close to the matter.

The build-out could represent China’s most aggressive plan yet to secure the future of its AI industry, the publication reported.

The idea is for a resilient Chinese AI industry with an interconnected data centre network and a reduced reliance on foreign technology from companies such as Nvidia and AMD. China also plans to integrate its power grid with the project, the sources said.

The funds set aside for the project, however, pale in comparison to the likes of Meta, which has a planned capital expenditure of as much as $145bn for this year alone, or Alphabet, which has set aside up to $190bn for 2026. Much of this spending has been earmarked for AI or compute-related investments.

The government spend, though, doesn’t account for private AI investment in China, which amounted to around $12.4bn in 2025.

Recent reports suggested that Chinese AI darling DeepSeek is nearing a $7.4bn raise backed by the likes of Tencent, Contemporary Amperex and the $8bn, state-backed National Artificial Intelligence Industry Investment Fund.

Meanwhile, Alibaba led a $293m funding round into ShengShu Technology, a Beijing-based start-up behind the Vidu AI video-generation tool.

China’s core AI industry – which boasts more than 6,200 companies – was valued at nearly $174bn in 2025, according to a government statement from March, while the market research firm International Data Corporation placed the Chinese AI market at some $63bn at the end of 2025, with estimates expecting it to cross the $200bn mark by 2029.

Bloomberg also reported that key Chinese state agencies, including the National Development and Reform Commission, are in early discussions to create a blueprint for a network of interconnected computing hubs across the country. Details of the early-stage discussions could change, the sources added.

The funds are reportedly expected to materialise via sovereign debt, including long-term government bonds and state funds meant for investment in strategic industries, as well as bank loans and private capital.

The plan forms a key part of the “six networks” programme announced earlier this year, which plans the build-out of computing, water, communication, urban underground pipe and logistics networks, and power grids, said Bloomberg sources.

Local suppliers, including Huawei, are to be tapped for at least 80pc of the required technology, such as AI chips, while state-run corporations such as China Mobile and China Telecom are expected to manage a majority of the data centres.

China is aggressive in its protection of home-grown technology. According to rules, state authorities need to approve the export of certain key technologies, including AI.

Earlier this year, the country took action against Meta over its acquisition of the Chinese-founded AI company Manus, demanding that the US tech giant undo the deal and restore Manus’s Chinese assets to their original state.

Meanwhile, the US government last month moved to close a loophole that could have been aiding companies to export advanced US-made chips to subsidiaries of Chinese companies located outside China.

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