China Unicom Launches $390m AI Data Centre Powered by Domestic Processors Amid US Trade Restrictions

China Unicom, operator of the second-largest mobile network in China, has announced plans to establish a $390 million AI data center in Xining, Qinghai province. The facility will be powered entirely by domestically manufactured processors.

The announcement was made on state broadcaster CCTV this week. At present, the data center operates 23,000 AI processors, delivering a computing power of 3,579 petaflops. Upon completion, this figure is set to increase to 20,000 petaflops.

A petaflop represents a computer’s processing speed equivalent to one quadrillion floating-point operations per second. This high capacity signifies the system’s ability to manage complex AI model training and inference workloads that demand massive parallel processing.

The project underscores Beijing’s strategy to construct AI infrastructure using local semiconductor technology, as opposed to relying on foreign chips. The urgency of this approach arises due to trade restrictions that limit Chinese companies’ access to advanced processors from American suppliers such as Nvidia.

Approximately 72% of the processors deployed in the facility are provided by Alibaba’s semiconductor unit T-Head. This company specializes in developing custom chips for cloud computing and AI applications, competing with international suppliers within the domestic market.