Xi's Inner Mongolia Visit Puts Ulanqab's AI Compute Boom in the Spotlight

On October 16, Xi Jinping spent the day in Ulanqab, a prefecture-level city on the Inner Mongolian grassland about 240 kilometers from Beijing. State media's readouts of the visit gave equal weight to two subjects: ecological protection, and green computing. For a city whose name in China has long been shorthand for potatoes, that second emphasis was a measure of how fast its economy is changing.

Ulanqab is known as China's "potato capital," and farming still shapes its image — "when you mentioned Ulanqab, you thought of stewed potatoes with beef," as CCTV Finance put it. But over the past two years the city has quietly become one of the country's most sought-after locations for AI data centers. In a post drawing hundreds of likes, CCTV Finance laid out the scale: 109 signed computing projects, major AI models queuing to move in, and — citing an August Goldman Sachs report — a ranking as one of the Asia-Pacific's largest and fastest-growing AI computing clusters.
The logic is geographic. Data centers consume electricity, and Ulanqab sits on some of China's richest wind and solar resources. The city hosts the country's first data-center "green-power direct connection" project — an integrated generation, grid and load setup that can supply up to 850 million kilowatt-hours of green electricity a year, according to CCTV Finance. Climate helps too: with average annual temperatures around 4.3 degrees Celsius, by one widely shared commentary's figures, servers there can be cooled with outside air for roughly ten months of the year, cutting the electricity that would otherwise go to air conditioning. And distance hardly matters: the city's one-way data latency to Beijing is just 2.1 milliseconds, close enough to serve the capital's AI industry in real time.

Weibo commentary framed the shift in striking terms. "In the digital era, the wind, sunlight and cold that were once background scenery have suddenly become the hardest currency," one widely read post argued, noting that green power reaches users at just over 0.2 yuan per kilowatt-hour. "Herders once followed water and grass," the post concluded. "Data centers now follow cold air and green power — a modern version of nomadism."

The visit carried a message in both directions. People's Daily's readout, relayed by government accounts, presented Ulanqab as a model of "leveraging comparative advantage" — a city determined to keep its traditional strengths ("sheep, coal, earth and gas," a phrase that puns on the idiom for pride) while adding "boundless wind and solar" — within a national push to build an integrated computing network. Taiwan's Central News Agency, which covered the trip, reported the cautionary note: Xi warned against "disorderly development and blind competition" in the sector, a notable signal for an industry where data-center construction has at times run ahead of demand.

For younger Chinese readers, the story carries a different sort of hope. "Is the development of AI an opportunity to redistribute resources?" one commenter asked. "Breaking resource monopolies is the shared expectation of young people in every era." Whether Ulanqab's model — compute following cheap clean power and cold air rather than the investor map — becomes the template for China's AI build-out will say a lot about where the next generation of that infrastructure, and the jobs around it, takes root.