China data center: Data center freebies vs involution

研报英文原文证据摘录

China data center: Data center freebies vs involution

Deutsche Bank

Research

Asia Industry Date

China 11 June 2026

China data center

Technology Industry Update

Software & Services

Data center freebies vs involution

Peter Milliken, CFA

China's mega push Research Analyst

Bloomberg reported earlier this week that China's government is planning a +852-2203 6190

RMB2tn investment over the next five years to accelerate AI data center build out,

with telcos leading the operations and 80%+ of the core equipment parts including

chips to be supplied by domestic players.

The underlying concept of establishing a nationwide utility-type computing

network for AI has been a documented goal, as seen with initiatives like the "Action

plan for the computing power interconnection" and "East data, west computing"

project (Figure 3). If this RMB2tn investment fully materializes, we estimate it could

add approximately 40GW of data center supply by 2031, more than doubling the

36GW today. This ambitious plan suggests confidence that the domestic chip

supply chain can handle such rapid expansion. A doubling of capacity in five years

is probably not a big surprise, but private operators typically are on track to add

around 5GW p.a., and if they do so outside of the government plan, the build-out

needs demand acceleration to come through or risks a downturn, and the history

of the data center market has been that more than doubling capacity in five years

leads to oversupply and profit disappointment, as typically capacity is rising along

with chip performance, so lifting IDC builds sharply can overwhelm demand. So,

will it be a case of "this time is different" due to AI being a structural change?

China has the advantages of low-cost, flexible open-source models, and low-cost