Guizhou province in southern China, long considered too rugged for agriculture and hard to attract investment, is emerging as a key hub in the age of artificial intelligence (AI). It owes this to having an optimal environment as a data center site essential for big tech. Steep gorges and vast mountains are becoming a "digital valley," beyond mere tourist attractions.
According to Guizhou officials and foreign media including Xinhua News Agency on the 11th, there are 50 data centers run by corporations operating in or newly building in Guizhou. Not only Chinese corporations such as Huawei, Tencent, Alibaba, and China Mobile but also global big tech like Apple have chosen Guizhou as a data center location.
Guizhou's secret to attracting big tech lies in nature. Average temperatures hovering around 20 degrees Celsius even in summer are a major draw for corporations that need to keep data servers cool. A local government official said the natural environment, like free air conditioning, "saves a lot of expense."
To maintain low temperatures, some have converted caves into tunnel-style facilities to run data centers. Tencent, which operates WeChat, China's largest messenger app, chose tunnel space covering 470,000 square meters in Guiyang to house a data center managing 300,000 servers.
Low electricity rates, with high power consumption being the biggest burden, are also drawing big tech data centers. With ample water resources and coal, Guizhou offers power at prices 30% cheaper than other regions in China.
If electricity in other regions costs 0.5 yuan per kilowatt-hour (kWh), Guizhou is around 0.35 yuan. Huawei, which has a data center in the Gui'an New Area of Guizhou, is said to save several billion yuan in electricity alone compared with locating in the east.
National-level strategy also helped. Since 2022, China has launched a project to build an integrated national big data system by establishing eight national computing hubs and 10 national data center clusters. Guizhou is one of the eight hubs.
It is also pushing the "East-to-West Computing" (东数西算) policy, which routes data processing demand concentrated in eastern megacities to data centers in the west. The idea is to process data from eastern coastal areas like Beijing, Shanghai, and Guangdong—where data is heavily produced and used—in the west, which is more favorable in terms of climate and energy. Land is also relatively abundant.
Once related clusters form, there are agglomeration effects in telecommunications infrastructure and specialized talent needed to build and operate data centers. U.S. corporation Apple also built a data center in Guizhou in 2017 with an investment of $1 billion (about 1.477 trillion won). All data generated in China, including iCloud, is stored and processed here.
It is growing beyond data centers into a computing hub. Related investment exceeded 22 billion yuan (about 4.814 trillion won) last year, and observers say it is establishing itself as an AI computing hub. Guizhou's computing capacity reached 150 exaFLOPS (a unit measuring computing performance) last year, more than a 300% increase from the previous year.