China’s $295 Billion Ambitions for AI Will Drive up Domestic High-Tech Stocks
China’s National Development and Reform Commission will spend 2 trillion yuan ($295 billion) over five years to build a nationwide network of artificial-intelligence data centres, according to Bloomberg.
Source: The Diplomat – Asia-Pacific · July 21, 2026 at 6:58 PM · AI-assisted report
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KUALA LUMPUR, 22 JULY 2026 —
China’s National Development and Reform Commission will spend 2 trillion yuan ($295 billion) over five years to build a nationwide network of artificial-intelligence data centres, according to Bloomberg.
Market Impact
The plan, led by Beijing, will rely on domestic suppliers for at least 80% of the hardware and software, including AI chips. China Mobile and China Telecom will operate the facilities and maintain connectivity between sites, while Huawei Technologies is expected to supply the bulk of the equipment. Global chipmakers such as Nvidia and Advanced Micro Devices would be largely excluded.
The policy aims to accelerate the rise of domestic AI champions. Zhipu’s open-source GLM-5.2 model has drawn comparisons with Anthropic’s Opus 4.8, and the company posted a 131.9% year-on-year revenue increase in its first reported quarter, rising to 724.33 million yuan ($104.8 million). Zhipu’s market capitalisation has already crossed HK$1 trillion, but it remains a fraction of Nvidia’s and Alphabet’s valuations, both above $4 trillion, according to Vsevolod Smirnov, head of marketing at Just2Trade.
“Government AI infrastructure projects will let China’s AI leaders close the cash-flow gap with U.S. rivals,” Smirnov said.
Analysts estimate the total capital requirement—including grid upgrades and wider digital infrastructure—could reach 5 trillion yuan ($735 billion). Citi highlights two immediate beneficiaries: GDS Holdings and Vnet Group, both data-centre infrastructure providers. GDS booked 200 MW of new capacity in the first quarter, while Vnet secured more than 500 MW, figures that underpin expectations of sustained demand.
China’s AI ambitions are embedded in the latest Five-Year Plan, which mentions “AI” more than 50 times across 141 pages and includes an “AI+ action plan.” The push spans industries from power utilities to cloud services, creating spill-over demand for domestic AI stacks.
Yet investors face volatility. Recent profit-taking in Asian tech markets erased 8% from South Korea’s Kospi index, underscoring the risk that sentiment can shift quickly even as the long-term pipeline lengthens.
The programme marks a strategic pivot: Beijing is substituting foreign AI chips with domestic alternatives while funding the physical backbone that will host them. For Chinese tech stocks, the upside is a sustained re-rating; for global incumbents, a prolonged period of restricted access to one of the world’s largest growth markets.