Ulanqab is expanding its data centre industry, drawing on a cool climate and renewable energy while creating jobs and exploring new AI applications.
Ulanqab, in China’s Inner Mongolia Autonomous Region, has long been known for its potatoes. Now, data centres are reshaping the city’s economy, creating new jobs and attracting investment to the grasslands.
For Gao Yandong, the change has brought a new career. In 2020, he returned to his hometown and joined a data centre in the Chahar High-Tech Development Zone. He had previously worked at a wind farm, after studying electrical power system automation at university.
Over the following years, Gao moved from operations and maintenance into testing and verification before equipment is delivered to customers. He has also helped build a team in the growing industry.
“I used to grow potatoes; now I grow tokens,” he said. “I have witnessed the changes in my hometown and benefited from them.”
Why Ulanqab?
The city has several advantages for data centre operators. Its average annual temperature is around 4.3°C, allowing facilities to use natural cooling for nearly 10 months of the year. It also has abundant wind and solar resources and is relatively close to Beijing and the wider Beijing-Tianjin-Hebei region.
Connectivity is another factor. Two dedicated optical-fibre links connect Ulanqab with Beijing, supporting low-latency data transmission. The reported end-to-end latency is 4.2 milliseconds.
Huawei began exploring the area for a cloud computing data centre in 2013. Its data centre in the Chahar High-Tech Development Zone began operating in 2016, with an investment of 1.6 billion yuan (about £170 million) and nearly 20,000 servers.
Since then, more companies have established a presence in Ulanqab. The city is part of China’s national computing network under the “Eastern Data, Western Computing” project, which directs some computing workloads to regions with suitable energy and land resources.
By August 2026, Ulanqab had signed agreements for 109 computing centre projects. Its computing capacity had reached 190,000 petaflops, with intelligent computing accounting for more than 90 per cent of the total, according to Xinhua.
The Chahar High-Tech Development Zone alone had 22 computing projects under construction, involving nearly 30,000 construction workers, according to local figures. These figures refer to the development zone, not the city as a whole.
Powering Data Centres More Efficiently
Data centres need a reliable electricity supply to keep servers running around the clock. Cooling systems also consume energy. For Ulanqab, the challenge is to meet this demand while making use of its renewable energy resources.
A zero-carbon computing base in Ulanqab combines wind and solar generation with the electricity grid and energy storage. Its wind and solar installations have a combined capacity of 300 megawatts, alongside 45 megawatts of energy storage. The project is expected to generate about 848 million kilowatt-hours of electricity annually for its own use.
The local energy model also includes dedicated distribution networks and direct supplies of renewable electricity. The reported electricity price for relevant data centre projects ranges from 0.32 to 0.38 yuan per kilowatt-hour. The share of electricity supplied directly from green sources exceeds 80 per cent in the projects covered by the figures.
Cooling efficiency is another important consideration. Data centres measure energy efficiency using power usage effectiveness, or PUE. This compares a facility’s total energy consumption with the energy used by its computing equipment. A lower figure means less energy is used by supporting systems such as cooling and power distribution.
Some facilities in Ulanqab have achieved a PUE below 1.2. At a data centre that uses one billion kilowatt-hours of electricity a year, a reduction of 0.1 in PUE could save close to 100 million kilowatt-hours, based on the estimate cited in the source material.
Water use also matters in a region with limited water resources. Some data centres use reclaimed water for cooling rather than groundwater. Ulanqab produces around 72 million tonnes of reclaimed water each year, of which about 30 million tonnes is reported to remain available for allocation.
The industry’s growing electricity demand makes these measures increasingly important. Ulanqab’s computing industry used 4.3 billion kilowatt-hours of electricity in 2025. Consumption is projected to reach 9 billion kilowatt-hours in 2026, according to local figures. As more projects come online, the city will need to expand renewable power supplies and improve energy efficiency.
Jobs and the Next Stage of Growth
As the industry expands, demand has grown for workers who can maintain power systems, cooling equipment and servers. Gao’s career change is one example of how local workers are moving into the sector.
Training programmes are helping prepare more people for these roles. The local “operations and maintenance craftsman” course runs for 40 days and combines technical training with practical skills. More than 1,000 people have completed training programmes, with the reported employment rate exceeding 99 per cent.
The changes are also reaching communities around the data centres. In Basumu Village, a local restaurant owner has seen more customers as workers arrive for construction and data centre operations. The couple running the business have also opened a small guesthouse.
Ulanqab is also looking beyond data centre construction and operation. At the end of 2025, the city introduced a three-year action plan to develop a “Token City”, aiming to build links between computing capacity, AI services and token-based applications.
The plan reflects a wider challenge for computing hubs: turning investment in infrastructure into more value-added business and local economic activity. For people such as Gao, the industry already offers a way to build a career without leaving home. For Ulanqab, it is bringing a new source of economic activity to a city long associated with potato farming.
If you liked this article, why not read: From Deserts to the Deep Sea: China’s Search for Greener Computing Power
