Alibaba, Tencent, Huawei Pour $17B Into 23 Shaoguan Data Centers

Shaoguan, a hinterland city in Guangdong, is channelling Rmb111.6 billion ($17 billion) into 23 AI-focused data centres, a sum equal to 65% of the city's annual economic output last year, with Alibaba, Tencent and Huawei anchoring the build-out, the Financial Times reports.

The concentration is deliberate. Guangdong stopped issuing data-centre energy quotas across the province in 2021 and 2022 and reopened them only for the Shaoguan hub, now the single national-level cluster in the Greater Bay Area, under Beijing's 'Eastern Data Western Compute' initiative. Shaoguan has approval to build out to 500,000 cabinets by 2025. Data-centre electricity use in the city rose fivefold in the first half of this year, ranking first in Guangdong by growth rate.

The payoff on the ground is harder to see. The FT writes that 'locals report pollution, slow job creation, and delayed land compensation'. Some villagers who have lost land to construction say compensation has not yet arrived. Local economic growth reached 5%, above the provincial and national averages.

The build-out continues anyway. Alibaba and China Telecom earlier this year brought up a 10,000-chip cluster in Shaoguan built around Alibaba's domestically-designed Zhenwu AI accelerators, the first deployment of that scale in the Greater Bay Area. The quotas remain closed across the rest of the province. This is the 454th story we have tagged in our AI infrastructure tracker over the past 90 days.