DeepSeek, a Hangzhou-headquartered artificial intelligence startup, is preparing a significant expansion of its compute footprint with plans for a one-gigawatt AI data center in Ulanqab, Inner Mongolia, people familiar with the matter told Bloomberg News.
The company intends to establish a dedicated facility in Ulanqab - about 350 kilometers northwest of Beijing - while also leasing additional capacity from third parties, according to people who requested anonymity because the information is private. DeepSeek's move is part of an effort to increase its computing infrastructure as it competes with leading AI models developed in Silicon Valley.
Local approvals compiled by a third party show that more than a dozen firms have projects slated for Ulanqab, indicating a cluster of planned data center developments in the city.
Insiders cited two timelines for the DeepSeek project: the firm is working to have at least a portion of the data center's capacity operational by the end of next year or in early 2028. The exact types of processors or accelerators that will power the facility have not been disclosed. The reporting noted that Nvidia Corp. semiconductors are the industry standard for AI data centers, while Huawei Technologies Co. plays the role of China's national champion in this technology area.
The announcement highlights several strategic choices for DeepSeek, including the mix of owned versus leased capacity and the selection of hardware vendors, though the latter remains unspecified. The company's stated timelines and the concentration of projects in Ulanqab point to a broader buildout of compute infrastructure in the region.
Summary
DeepSeek plans to add one gigawatt of computing capacity in Ulanqab, Inner Mongolia, constructing its own facility and leasing additional capacity. The company aims to bring at least part of the capacity online by the end of next year or early 2028. The choice of chips for the project has not been revealed; industry-standard Nvidia semiconductors and Huawei's role as China's major player in AI hardware were both mentioned.
Key points
- DeepSeek is planning a one-gigawatt AI data center in Ulanqab, Inner Mongolia, with a combination of owned and leased capacity.
- More than a dozen companies have projects planned in Ulanqab, indicating a cluster of data center developments.
- The company aims for at least partial operation by the end of next year or early 2028; the specific chip vendors and models to be used remain unspecified.
Risks and uncertainties
- Timing risk: DeepSeek's target to bring part of the capacity online by the end of next year or early 2028 is a stated goal, but the plan's schedule is not guaranteed.
- Hardware uncertainty: The type of chips that will power the data center is currently unclear, which leaves questions about performance, supplier dependence, and procurement timelines.
- Regional concentration: With more than a dozen firms planning projects in Ulanqab, competition for local resources and approvals could affect project execution and costs.
Sectors potentially affected
- Data center and cloud infrastructure
- Semiconductor and AI hardware suppliers
- Energy and utilities supporting large-scale compute loads