Cover Story: The Promise and Risks of China’s AI Infrastructure Rush

Detailed summary

Cheap power, scarce development approvals and long-term leases are attracting investors to computing campuses. Durable returns will depend on how much AI usage becomes sustained revenue

For Chinese bankers struggling to deploy capital in a protracted property downturn, a new opportunity is taking shape in the country’s windswept north and west: data centers that power artificial intelligence.

Across the arid expanses of Ulanqab, in Inner Mongolia, and Zhongwei, in Ningxia, sprawling computing campuses are rising alongside vast wind and solar power plants. Banks, insurers, private equity firms and local governments are converging on a business that promises something increasingly hard to find — large investment opportunities backed by identifiable customers and a potential steady cash flow.

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