Ulanqab, a city in China’s Inner Mongolia Autonomous Region, is emerging as a major data-center hub. Cold winters, relatively inexpensive electricity, and improved fiber links help explain its appeal—but coal dependence and pressure on local water supplies complicate the story.
Where is Ulanqab, and how large is its data-center buildout?
Ulanqab is in Inner Mongolia, north of Beijing. According to WIRED’s August 21, 2026 report, nearly 100 data centers had opened or entered construction there since 2016. Companies had also pledged projects with an estimated combined capacity of 12.5 gigawatts, an estimate WIRED attributes to a Goldman Sachs research note. More than 70 percent of those commitments were announced in the preceding year, according to the same report.
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These figures describe reported facilities and project commitments, not a count of data centers all operating at full capacity. The distinction matters: a pledged gigawatt is not the same as electricity already being consumed by completed, functioning infrastructure.
Why are data-center companies choosing Ulanqab?
Cold weather can reduce cooling needs
Long, cold winters can help data centers manage the heat produced by computing equipment. Less reliance on mechanical cooling can make a location more attractive, though the benefit varies with facility design and weather, and does not remove the need for water or power.
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Electricity is relatively inexpensive
WIRED describes comparatively low electricity prices as another draw. For facilities running large numbers of servers, power costs are a central operating consideration. But a low price does not establish that the electricity is low-carbon or that sufficient power is available at every hour.
Fiber links connect the city to users and networks
Ulanqab is far from many of the people who use AI services, but it is relatively close to Beijing and has improved connectivity. WIRED reports that two dedicated fiber-optic cables, built in 2017 and 2019, brought average latency below five milliseconds. That figure is the average reported by WIRED, not a guarantee for every route, service, or user.
Why does AI make a remote data center useful?
AI computing includes different workloads, and they do not have identical network requirements.
| Workload | What it does | How latency affects it |
|---|---|---|
| Model training | Uses computing resources over extended runs to train or update a model. | Often more tolerant of distance because it does not require a continuous real-time exchange with an end user. |
| Inference | Runs a trained model to produce a response, such as an answer to a user’s prompt. | More sensitive to responsiveness because users are waiting for an output; network links and proximity can matter. |
That difference helps explain the interest in remote sites: training can make use of computing capacity without the same immediate response-time demands as interactive inference. Better fiber connectivity can also make a site more suitable for latency-sensitive uses than a poorly connected location farther away. Andrew Stokols, a professor at Singapore Management University who studies China’s compute infrastructure, told WIRED: “With the rise of AI in 2022, there was the realization that actually, those remote data centers could be well-utilized for model training.”
Which companies are associated with projects there?
WIRED associates DeepSeek, ByteDance, Alibaba, and Xiaohongshu with projects in Ulanqab. The report also describes AI companies investing directly in infrastructure rather than relying only on rented cloud computing. Those associations should not be read as confirmation that every announced project is complete or operating; reported activity includes planned and developing projects.
Does Ulanqab’s AI growth run on clean energy?
Not on the evidence reported by WIRED. Wind and solar power are expanding, but coal still supplies about 37 percent of Ulanqab’s electricity, according to research by Andrew Stokols cited in the article. The figure describes the reported electricity mix; it does not mean that every data center draws the same mix at every hour.
Data centers need dependable power around the clock. Renewable generation capacity and the electricity actually available when servers need it are not interchangeable: the latter depends on timing, grid connections, and reliable supply. Damien Ma, director of Carnegie China, described Inner Mongolia as “the West Virginia of China. It’s a coal country,” in WIRED’s report. He also offered a conditional possibility: “in three years, maybe it will be completely powered by renewables.” That is a forecast, not an established outcome.
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What is the water tradeoff?
Water is a significant constraint in an arid city. WIRED reports that Ulanqab has about 1.5 million residents and receives roughly 14 inches of rain a year. The article says the local water company had to shut off several waterworks for seven hours each night during the previous month to ease peak demand.
At the same time, local government weather data cited by WIRED indicates that data centers may need additional cooling water during only two months of the year. That seasonal pattern is relevant, but it does not resolve the wider question of water availability as more facilities are built. Cooling demand is not necessarily constant year-round, while the combined effect of new infrastructure on a water-stressed area remains a concern.
Quick Recap
What the reported numbers do—and do not—show
- Nearly 100 facilities: WIRED reports that nearly 100 data centers had opened or begun construction since 2016; this is not a count of fully operational facilities alone.
- 12.5 gigawatts pledged: WIRED attributes this estimated combined capacity to Goldman Sachs. It is a project-commitment estimate, not verified operating capacity.
- More than 70 percent announced in the prior year: WIRED attributes this share of commitments to Goldman Sachs; it signals a recent surge in announcements, not completion.
- About 37 percent coal-fired electricity: WIRED cites Andrew Stokols for this share of Ulanqab’s electricity supply.
- Below five milliseconds average latency: WIRED reports this figure after two dedicated fiber cables were built in 2017 and 2019; it is an average, not a universal connection guarantee.
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