Xiaohongshu reportedly bets on Inner Mongolia for AI data centre

Xiaohongshu is reportedly planning a large data centre in Inner Mongolia, joining China's broader AI infrastructure drive. The project carries a HK$15 billion budget, excluding semiconductor costs, and a 600 megawatts (MW) capacity, according to SCMP. 

Ulanqab, renowned for its wind farms and clean energy projects, is one possible site for the data centre, with another location just west of the city also under consideration, according to the report. 

This aligns with China's broader push to build out artificial intelligence infrastructure. Inner Mongolia is emerging as an AI hub, largely because of its lower electricity costs. On 31 July, Jiang Yi, a spokesperson for the National Development and Reform Commission, said it expects to invest about  HK$4.3 trillion over the next five years to expand the national computing network under the 15th five-year plan.

MARKETING-INTERACTIVE has reached out to Xiaohongshu for more information. 

On a similar note, DeepSeek, much like Xiaohongshu, has set its sights on Ulanqab, Inner Mongolia, for a 1GW-class AI data centre, according to Bloomberg. It has also intended to rent extra computing power from other firms. The choice of Ulanqab comes down to its cost advantages in power and cooling, helped by an average yearly temperature of about degrees Celsius.

The Chinese artificial intelligence company has planned to bring part of the data centre's computing capacity online by the end of 2027 or early 2028, according to the report. It remains unclear which chips the project will use, but the move signals that Chinese AI companies can now invest in hyperscale AI infrastructure, much like their Silicon Valley counterparts.

According to the report, DeepSeek posted job openings in Ulanqab, Inner Mongolia, this past April, including positions for a senior data centre delivery manager and a senior data centre operations and maintenance engineer.

Over the years, Ulanqab has drawn 55 companies, including Huawei, Alibaba, Apple, and Kuaishou. Together, they have signed 67 data centre projects, 64 of which are AI computing centres, with total investment exceeding HK$280 billion.

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