Ulanqab in Inner Mongolia is becoming one of the regions in China with the fastest expansion of AI data centers. Reports citing Goldman Sachs data indicate that as of June 2026, the area has received capacity commitments totaling 12.5GW from data center operators, internet companies, and AI enterprises, a significant increase from 3.3GW in July 2025.

Low latency and low electricity prices attract the aggregation of computing power.

Behind this round of expansion, the key factors are its proximity to Beijing, lower electricity prices, and a higher proportion of green energy supply. Ulanqab is about 240 kilometers away from Beijing, with a fiber optic round-trip latency of approximately 4.2 milliseconds, which allows it to meet the computing power demands of the Beijing-Tianjin-Hebei region.

At the same time, the local new energy installed capacity has exceeded 20GW, with a high proportion of green electricity. The electricity price at data center terminals is approximately 0.33 to 0.36 yuan per kilowatt-hour, which is lower than in most areas of the Beijing-Tianjin-Hebei region. With an average annual temperature of about 4.3°C, the area can make use of natural cooling sources for most of the time, reducing cooling costs.

Electricity consumption and computing power data both rise simultaneously.

Demand-side data also shows a rate of expansion. By 2025, the Ulanqab data center had utilized its capacity by more than 70% year-on-year, reaching approximately 800MW; as of June 2026, the online computing power reached 165 EFLOPS, more than doubling from the previous year.

In the first half of 2026, the electricity consumption of local data centers increased by 90% year-on-year to 3.3 TWh, accounting for 7% of the city's total electricity consumption. This indicates that new projects are not just at the planning stage; the operational intensity of existing data centers is also on the rise.

Green power direct supply becomes a key focus for new projects

Unlike traditional IDC which mainly relies on the public power grid, Ulanqab is promoting a "direct connection of green electricity" model. Some enterprises supply power directly to their data centers through self-built wind farms, dedicated lines, and energy storage facilities, in order to reduce their dependence on the public power grid and increase the proportion of green electricity usage.

The report mentioned that the "Star River Base" launched by VisionTech Group in Ulanqab has a planned capacity of 2GW, with the goal of achieving large-scale parallel computing power. Such projects not only provide data centers but also advance the construction of energy supply, energy storage, and data centers as a package to meet the high-volatility electricity demand associated with AI training and inference.

Large-scale delivery or after 2028

However, capacity commitments do not necessarily mean that they will all be realized in the short term. Reports indicate that China is not facing a power shortage; rather, there is still a need to accelerate construction in areas related to transmission lines, substations, and energy storage. Once data centers are concentrated in certain regions, the pressure on the regional power grids will increase significantly, which will also affect the speed at which projects can be completed.

Goldman Sachs expects that China's data center online capacity will increase from 28GW in 2025 to 53GW by 2030. In contrast, the 12.5GW of committed capacity currently obtained by Ulanqab is already approximately three times that of Johor State in Malaysia. However, reports also mention that the local area may not see a large-scale release of capacity until after 2028.