Shanghai plans to complete at least five large-scale data centers by the end of 2025 to address rising demand for computing power, according to a recent announcement from the Shanghai Communications Administration.

The city aims to push its AI computing capacity beyond 100 exaflops through this initiative.

An exaflop is a unit measuring computer speed, equal to 1 quintillion floating-point operations per second.

China’s national computing power reached 246 exaflops as of June 2024, second only to the US, according to the China Academy of Information and Communications Technology.

A report from Moody’s Ratings says China is likely to remain the largest data center market in Asia Pacific, with annual growth projected at about 20% through 2030.

Shanghai’s efforts reflect a broader trend of local governments in China expanding digital infrastructure to support artificial intelligence development.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s data center boom reflects systematic infrastructure scaling beyond individual cities

Shanghai’s plan to build five new data centers represents part of a much larger national infrastructure push that extends far beyond any single metropolitan area.

China’s data center market is projected to reach $86 billion by 2027, growing at 5.7% annually, driven by widespread adoption of cloud computing and IoT across the country1.

This systematic approach helps explain why Moody’s identified “a new wave of data center construction across the country” following DeepSeek’s January launch, rather than isolated regional developments.

The scale becomes clearer when considering that China expects to maintain 20% annual growth in data center capacity through 2030, making it the largest such market in the Asia-Pacific region with strong government policy support.

Shanghai’s target of exceeding 100 exaflops in AI computing capacity fits within this broader context of infrastructure development designed to support national AI ambitions rather than just local demand.

2️⃣ Infrastructure buildouts help close performance gaps in competitive technology races

China’s aggressive data center expansion coincides with rapidly narrowing performance gaps in AI model capabilities compared to US counterparts.