Chinese tech giant Alibaba Group has partnered with state-owned China Telecom to launch a next-generation AI data center powered by domestically developed chips, marking a significant step in China’s push to build sovereign AI infrastructure. The facility located in Shaoguan, Guangdong province is initially equipped with around 10,000 of Alibaba’s in-house Zhenwu AI chips and designed to scale to as many as 100,000. Alibaba AI data center in China will also support enterprise-grade AI workloads and large language models (LLMs). Additionally, the project comes as China’s technology sector accelerates investment in domestic compute capacity amid ongoing geopolitical constraints on access to advanced foreign semiconductors. This, together with other technologically advanced developments such as the world’s first offshore wind-powered underwater data center in Shanghai, positions the initiative as both a strategic and technological milestone for China in the global AI race.

Why is Alibaba AI Data Center in Guangdong, China Important?

The Alibaba-China Telecom initiative in Guangdong is part of a broader transformation in China’s digital infrastructure landscape. The new landscape has AI rapidly becoming the dominant driver of capital deployment.

Alibaba has also committed to tens of billions of dollars in AI and cloud infrastructure investment. The Chinese tech giant now aims to generate over $100 billion in AI-related revenue within five years.

At the same time, Alibaba is also developing proprietary AI chips such as the Zhenwu and XuanTie series, and launching enterprise AI platforms and agent-based systems. This is while expanding global data center infrastructure with new installations across the globe.

The Alibaba-China Telecom initiative for an AI data center in Guangdong also points towards two main realities. These are:

1. The explosive demand for AI compute capacity
2. Independence from Western semiconductor supply chains

China Telecom’s role as operator is also key as it stresses the influence of state-backed telecom infrastructure in scaling AI deployment across China.

Project Development and Scope of Alibaba AI Data Center in Guangdong, China

The newly announced Alibaba AI facility in China is a flagship domestic compute platform for the country’s enterprise AI ecosystem.

Key Development Highlights

Initial deployment: 10,000 AI chips

Planned expansion: up to 100,000 chips

Operator: China Telecom

Main use case: enterprise AI models and applications

The facility will serve as a testbed for Alibaba’s proprietary chip architecture. This is while evaluating its ability to compete with global leaders in high-performance AI compute.

The AI data center project in Guangdong is also expected to:

• Support LLM training
• Enable AI agent platforms for enterprise automation
• Strengthen domestic cloud and AI ecosystems

Technical and Infrastructure Scope

The project is a shift toward vertically integrated AI infrastructure. It combines in-house chip design (Alibaba T-Head division), cloud platform integration (Alibaba Cloud), and telecom-grade data center operations (China Telecom).

This stack reduces reliance on foreign suppliers while enabling greater control over performance optimization and scalable deployment across China’s telecom backbone. More importantly, it enhances China’s data sovereignty.

The use of Alibaba’s domestically developed chips is also particularly significant given restrictions affecting access to leading-edge GPUs from companies like Nvidia.

Alibaba AI Data Center in Guangdong, China: Project Cost

While the specific capex for this facility has not been disclosed, the AI data center in Guangdong forms part of Alibaba’s broader $53 billion AI and cloud multi-year investment program. The facility also features in the ongoing Alibaba enterprise AI product expansion and infrastructure scaling.

Additionally, China Telecom contributes to the Alibaba AI facility through existing nationwide data center footprint, telecom infrastructure, and operational capacity.

Who is backing Alibaba AI Data Center in Guangdong, China?

Developer

• Alibaba Group

Technology Lead

• Alibaba Group

Data Center Operator

• China Telecom

Chip Development

• Alibaba T-Head Semiconductor Division

Cloud and AI Platform

• Alibaba Cloud Intelligence