HOHHOT: Ulanqab, a city in northern China’s Inner Mongolia Autonomous Region traditionally known for potato farming, is rapidly developing into a major artificial intelligence computing centre, attracting technology companies, investment and skilled workers as demand for AI infrastructure accelerates.
The city’s transformation is being driven by its access to renewable energy, naturally cool climate and high-speed data connections to Beijing. A dedicated fibre-optic link connects Ulanqab with the Chinese capital, achieving a measured one-way transmission delay of just 2.1 milliseconds.
According to a Goldman Sachs report, Ulanqab has emerged as one of the largest and fastest-growing AI computing clusters in the Asia-Pacific region, with several leading technology companies establishing operations in the city.
Inner Mongolia’s climate allows data centres to use natural cooling for nearly 10 months of the year, reducing energy requirements. The region also offers sufficient land for large-scale computing facilities, abundant green electricity and network connections to the Beijing-Tianjin-Hebei region with latency below five milliseconds.
Ulanqab expands AI computing capacity
The scale of investment has transformed areas that were largely undeveloped just a few years ago.
Zhou Yiguang, director of resource development at VNET Group’s Ulanqab base, recalled finding relatively little development when he first visited the area to assess a potential project site in 2022.
VNET, a digital infrastructure services provider, now has projects covering a planned 1,100 mu, or approximately 73.3 hectares, with a combined planned IT capacity of around 1.3 gigawatts. The facilities are designed to support computing clusters at the scale of one million accelerator cards.
In November 2025, Ulanqab introduced a three-year plan to develop what it calls a “token city”, linking renewable power generation with AI computing and the commercial value generated by AI tokens, the units of information processed by artificial intelligence models.
The city has taken on 75,000 petaflops of computing workloads from Beijing, supporting large AI model training for companies including ByteDance, DeepSeek and Baidu.
The computing resources are being used in applications ranging from computer vision and autonomous driving to film and television rendering.
Ulanqab’s operational computing capacity has reached 190,000 petaflops, with AI-focused computing accounting for more than 90 percent of the total.
Official figures show that fixed-asset investment in the city’s computing industry increased by 39 percent during the first half of 2026. Electricity consumption rose by 90 percent, while industry revenue grew by 12 percent compared with the same period a year earlier.
Inner Mongolia attracts major technology investment
The AI expansion extends beyond Ulanqab, with Inner Mongolia introducing policies to support data infrastructure, green computing and the emerging token economy.
By June 2026, 20 of China’s 30 leading private computing-power companies had established a presence in the autonomous region, attracting investment exceeding 200 billion yuan, approximately $30 billion.
By August, Inner Mongolia’s total computing capacity had reached 363,000 petaflops, nearly quadrupling in less than two years.
The growth reflects rising demand for the computing infrastructure needed to train and operate increasingly sophisticated artificial intelligence systems.
AI boom creates jobs for young workers
Ulanqab has attracted more than 100 data centre projects, creating demand for technicians specialising in electrical systems, cooling equipment, server maintenance and infrastructure management.
For 23-year-old Chen Gang, the industry’s expansion has provided an opportunity to build a career in his hometown.
Like many young people from the traditionally agricultural region, Chen initially left Ulanqab in search of employment, working as a hotel waiter in Qingdao, Shandong Province.
He later returned after learning about opportunities in the growing data centre industry, enrolled in a local training programme and secured a technical position.
His responsibilities now include inspecting power supplies, cooling systems and server rooms to ensure facilities operate safely and efficiently.
The job requires knowledge of electrical equipment, heating and ventilation systems, low-voltage infrastructure and fire safety.
More than 20 computing-power companies have established operations in Ulanqab during 2026, creating additional opportunities for young workers seeking employment closer to home.
An industry-education integration centre in Inner Mongolia, which connects computing facilities with vocational training programmes, has trained more than 2,000 AI professionals.
The expansion comes amid a sharp increase in China’s use of artificial intelligence.
By March 2026, the country’s average daily AI token usage had surged to approximately 140 trillion, compared with around 100 billion in early 2024.
As AI demand grows, Ulanqab’s transition from an agricultural centre to a computing hub illustrates how investment in digital infrastructure is creating new industries and employment opportunities in China’s northern regions.