China Commits $295B to Build Sovereign AI Compute Grid, Shuts Out Nvidia

$295.43 billion. That’s what China plans to pour into AI data centers over the next five years — 2 trillion yuan aimed squarely at building a sovereign compute grid that shuts out Nvidia and AMD.

Bloomberg News reported Tuesday that China’s National Development and Reform Commission is leading a multi-agency effort to draft a blueprint for inter-connected computing hubs across the country. State-owned giants China Mobile and China Telecom will operate the bulk of these centers and handle the networking between them.

The $295B Blueprint for a Sovereign AI Grid

The plan covers a five-year horizon and is China’s response to the intensifying AI race with the US. A new five-year policy blueprint already signals aggressive AI adoption across the world’s second-biggest economy, targeting emerging technologies like quantum computing and humanoid robots. The data-center blueprint itself remains in early discussions — details could shift — but the scale is unambiguous.

80% Domestic Hardware: The Chinese Supply Chain Play

Here’s the part that makes Nvidia’s stock twitch: the draft requires that at least 80% of technology — including AI chips — come from local suppliers. Huawei Technologies is the prime beneficiary. The text explicitly says this would “effectively squeeze out Nvidia and Advanced Micro Devices.” That’s not a side effect; it’s the mechanism.

Reuters reported last year that the Chinese government already issued guidance requiring any new data center project receiving state funds to use only domestically made AI chips. This new plan scales that requirement nationwide.

The US Counterpoint: $700 Billion This Year Alone

For context, US Big Tech companies are expected to spend more than $700 billion this year alone on AI buildout. China’s $295 billion over five years is less concentrated, but it’s entirely state-directed and built on a closed supply chain. The US spends through private capital; China spends through state planning and domestic procurement mandates.

If executed, this plan would cement China’s AI hardware independence — and turn the AI race into a test of infrastructure sovereignty, not just model architecture.

Source: China prepares $295 billion plan to fund nationwide AI buildout: Report
Domain: economictimes.indiatimes.com