Journey simply two hours west of Beijing by prepare, and also you’ll end up surrounded by the rolling grasslands and historical cinder cones of Inside Mongolia. This huge, arid land has lengthy been China’s capital of sheep farming and coal mining, however over the previous couple of years, it has grow to be the hottest place in the nation to construct an AI data center.
In Ulanqab, a metropolis in Inside Mongolia dwelling to about 1.5 million folks, almost 100 information facilities have been opened or begun development since 2016. Chinese language firms have pledged to construct tasks with a mixed estimated capability of 12.5 gigawatts in the metropolis, and over 70 % of the complete commitments have been introduced in simply the final 12 months, making it one in every of the quickest rising compute clusters in Asia, in accordance to a analysis be aware revealed by Goldman Sachs final week. For comparability, OpenAI’s $500 billion Stargate Venture is set to attain solely 10 gigawatts of complete capability when it’s full.
Chinese language firms are flocking to Ulanqab for numerous causes. The town sits at excessive elevation on the Inside Mongolian Plateau and has lengthy, chilly winters, which implies information facilities there don’t want to use as a lot vitality to keep cool. It’s additionally comparatively shut to Beijing, so information could be transmitted to China’s populous areas with minimal latency. However the most attractive issue has to do with prices. Electrical energy is cheaper in Inside Mongolia than virtually anyplace else in China, pushed by each the robust progress of wind and photo voltaic vitality and an ample provide of coal.
What’s additionally fascinating is who is constructing these information facilities. For the first time, Chinese language AI firms are making massive investments in their very own infrastructure, slightly than renting compute from cloud firms. DeepSeek is reportedly constructing an enormous AI information heart in Ulanqab, as are ByteDance, Alibaba, and Xiaohongshu. For years, Chinese language AI firms have spent far much less on constructing bodily infrastructure than their American friends, regardless of creating numerous widespread AI fashions with spectacular capabilities. The Ulanqab information heart growth alerts that now they are lastly beginning to catch up.
There’s only one drawback: discovering sufficient water. Ulanqab is about as dry as Denver, getting solely roughly 14 inches of rain every year. The native authorities is already struggling to present sufficient water to meet resident demand—before lots of the deliberate information heart tasks are even up and working. Final month, the native water firm in Ulanqab was pressured to turn off a number of waterworks for seven hours every night time to mitigate peak demand. The info facilities being in-built the metropolis will want much less water in the winter—climate information from the native authorities of Ulanqab reveals they solely require further water for cooling throughout two months out of the 12 months—however all of the new infrastructure might nonetheless pose a big environmental problem for the area.
The Boonies
Inside Mongolia has been an information heart scorching spot for a minimum of a decade, lengthy before the present AI growth. Huawei constructed its first one in Ulanqab in 2016, and Apple adopted swimsuit three years later. In 2021, the space was designated as one in every of the fundamental hubs of a country-wide authorities undertaking dubbed “Eastern Data, Western Compute,” which goals to construct information facilities in the Western hinterlands of China.
There was one main downside, although. As a result of they are situated far from China’s populous jap coast, these information facilities initially confronted excessive latency charges when transferring information to the majority of customers. Because of this, they had been initially largely relegated to backup storage—till AI gave them a brand new function. “With the rise of AI in 2022, there was the realization that truly, these distant information facilities could possibly be well-utilized for mannequin coaching,” says Andrew Stokols, a professor at Singapore Administration College who research China’s compute infrastructure. A coaching run for an AI mannequin can take months and doesn’t require a lot real-time tinkering, so latency is much less of a difficulty.
Comparatively talking, Ulanqab is additionally not actually that far-off. Inside Mongolia is a lot nearer to Beijing and different main metropolitan areas in China than any Western information heart hub is. And it’s now related by two devoted fiber optics cables in-built 2017 and 2019 that decreased common latency speeds to lower than 5 milliseconds, quick sufficient to assist real-time information exchanges like AI inference.
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