In the remote deserts of Xinjiang, China is building the foundation of its AI future. A Bloomberg analysis of investment approvals, tender documents, and company filings reveals Chinese firms aim to install more than 115,000 banned Nvidia AI chips across dozens of data centers in the country's western regions.
Seven Xinjiang projects targeting these processors had started construction or won open tenders for AI computing services as of June 2025. One of the largest involves a company controlled by Nyocor Co., a Tianjin-based energy firm primarily engaged in renewable power, which proposes to build a data center powered by 625 H100 servers - one of the restricted Nvidia models.
These facilities would significantly enhance China's computing capabilities as President Xi Jinping emphasizes technological self-reliance. At an April 2025 Politburo meeting on AI, Xi stressed creating an "autonomously controllable" AI hardware and software ecosystem. One investor has pledged over 5 billion yuan ($700 million) for data center projects in Yiwu County during 2025-2026.
The planned infrastructure would support advanced AI models like those from DeepSeek, whose R1 model stunned global markets in January 2025 by matching or surpassing Western counterparts while reportedly requiring significantly less computing power and development cost. One Xinjiang operator already claims to be using advanced hardware to support cloud access to DeepSeek's R1 model.
However, these ambitions face significant obstacles. The US restricted leading-edge Nvidia chip sales to China in 2022 over concerns that advanced AI could provide Beijing with military advantages. US officials estimate only about 25,000 restricted Nvidia processors are currently in China - far fewer than the projects would require. The Chinese documents contain no explanation of how companies plan to acquire these chips, which cannot be legally purchased without US government licenses.
While the complex would still be dwarfed by AI infrastructure in the US, it represents China's determination to advance in the global AI race despite export controls. The projects also highlight the growing technological divide between the two superpowers as both nations prioritize AI development as essential to their future economic and strategic interests.