The Unlikely Place at the Center of China’s AI Boom

Ulanqab, Inner Mongolia, with a population of about 1.5 million, has opened or begun constructing nearly 100 AI data centers since 2016, committing roughly 12.5 GW of capacity. Over 70% of these commitments were announced in the past year, making it Asia’s fastest-growing compute cluster. DeepSeek, ByteDance, Alibaba and Xiaohongshu are building facilities to use the region’s cheap wind-solar-coal electricity and low-temperature cooling, while the city’s limited 14-inch annual rainfall is already stressing water supplies.