China's 'Potato Capital' Transforms Into AI Computing Hub
Ulanqab pivots from agriculture to data infrastructure amid national AI expansion strategy.
1Agricultural Land Becomes Tech Hub
Ulanqab, historically known as China's potato capital, is undergoing a massive industrial shift. Farmers like Zhang Zhiyong are selling land to accommodate sprawling AI data centres. This transition marks a departure from four decades of traditional agriculture, as the city emerges as a critical node in China's national computing infrastructure network.
2National Strategic Computing Shift
The city's rapid development aligns with China's East Data, West Computing strategy. This policy aims to relocate intensive computing workloads from developed eastern regions to western areas with abundant land and renewable energy. Ulanqab currently hosts 109 computing-centre projects, with AI-focused infrastructure accounting for over 90 percent of its total capacity.
3Economic Impact on Local Residents
The construction boom has created new economic opportunities for local residents. Farmers received significant compensation for land, while service workers like Gao Lina have found lucrative niches selling food to construction crews. However, as projects transition from building phases to operational stages, the nature of available local employment is shifting toward engineering.
4Tech Giants Invest in Chahar
The Chahar High-Tech Development Zone has become a magnet for major technology corporations. Huawei, Alibaba, and Apple operate facilities within this cluster, drawn by the region's wind and solar resources. President Xi Jinping recently visited the site, emphasizing the need for better coordination between computing power, electricity, and local water resource management.
5Leveraging Climate for Efficiency
Ulanqab's cool climate provides a natural advantage for data centre operations. Operators like UCloud utilize outdoor air for cooling during eight to ten months of the year. This approach significantly reduces the reliance on energy-intensive mechanical refrigeration, allowing facilities to maintain server temperatures while minimizing their overall environmental and energy footprint.
6Water Sustainability Concerns Arise
Despite the efficiency gains, the region's history of drought raises questions regarding long-term water sustainability. While data centres currently consume only 0.33 percent of the city's water, experts warn that total consumption could rise. Municipal authorities are exploring the use of reclaimed water to mitigate potential strain on the local supply.
7Advanced Cooling Technology Adoption
As AI servers generate more heat, air-cooling methods are reaching their physical limits. Companies are increasingly deploying liquid-cooled server racks to manage higher-density computing equipment. This transition is essential for maintaining operational efficiency, though it necessitates careful monitoring of water-use intensity compared to traditional air-cooled systems used in hotter southern regions.
8Shifting Livelihoods and Land Use
The expansion of data centres has reduced available grazing land for local livestock farmers. Residents like Hu, who tends to sheep, report that open grasslands are shrinking due to construction projects. While some families have benefited from compensation or new service jobs, the traditional rural landscape is permanently altered by infrastructure.
9Infrastructure and Water Management
Local authorities have invested heavily in water infrastructure, including a 163 million yuan project completed in 2023. This initiative added six wells and 45km of pipelines to support the urban area. Further investments of 170 million yuan are planned for 2024 to upgrade rural water supplies and ensure consistent access for residents.
10The Challenge of Peak Demand
Experts like Zhong Shifa from Tongji University emphasize that sustainability must be verified through actual operating data. The true test for the region will occur during periods when high temperatures, low water availability, and heavy computing demand coincide. Continuous monitoring of these variables is required to ensure the industry's long-term viability.
11Balancing Growth and Resources
Municipal water bureau director Yang Yong noted that while current consumption is low, the pressure on regional carrying capacity remains a concern. The city produces 72 million cubic metres of reclaimed water annually, providing a potential buffer. Balancing industrial growth with the needs of the agricultural sector remains a delicate policy challenge.
12Future Outlook for Ulanqab
Ulanqab stands at a crossroads between its agricultural heritage and a high-tech future. The success of this transition depends on technological efficiency and careful resource management. As the city continues to host critical AI infrastructure, its ability to balance economic development with environmental constraints will serve as a model for other regions.
Original article: CNA – Asia — China's 'Potato Capital' Transforms Into AI Computing Hub