ByteDance Ltd., the parent company of TikTok, is reportedly discussing plans to build a data center in the Inner Mongolia Autonomous Region of northern China.
The South China Morning Post (SCMP) reported on the 3rd, citing sources, that ByteDance Ltd. is in early-stage talks with local firms on building a data center to add 5–6 gigawatts (GW) of computing capacity.
The planned artificial intelligence (AI) data center cluster is expected to be located in Jining District, Ulanqab. According to the sources, ByteDance Ltd. aims to take delivery of the facilities by early 2028.
Ulanqab has drawn successive computing infrastructure investments from major IT corporations thanks to its cool climate, low electricity costs, and proximity to Beijing. Companies investing in computing facilities in the area include telecommunications equipment maker Huawei, short-form and AI company Kuaishou, e-commerce company Alibaba, and U.S. company Apple.
There are also projections that the data center investment being pursued by ByteDance Ltd. could reach hundreds of billions of yuan. According to a report released last month by China's Dongwu Securities, the initial investment required for a 1 GW AI data center typically stands at 160 billion yuan (about 32.3 trillion won). A simple application of that to the scale ByteDance Ltd. is pursuing would put the investment at about 800 billion–960 billion yuan (about 162 trillion–194 trillion won).
ByteDance Ltd. has recently been active in raising funds. On the same day, Bloomberg reported that ByteDance Ltd. secured $29.6 billion (about 40 trillion won) in loans from multiple banks. According to SCMP, this is the second-largest U.S. dollar-denominated loan in Asia this year.
China's AI industry has recently been racing to invest in AI infrastructure. Alibaba and Tencent have also sharply increased expenditure on AI-related infrastructure and computing resources. In the second quarter this year, capital expenditures jumped 75% and 176% year over year, respectively.