Inside China's data island: Huawei's UB-Mesh unifies AI compute

In the Yangtze River basin, on an island of more than 300 hectares in the city of Wuhu, one of China’s most ambitious digital undertakings is taking shape. Where rice paddies once stretched, a “data island” is set to rise—a massive cluster of data centers for Huawei, China Mobile, China Telecom, and China Unicom. This hub is part of a broader $37 billion initiative that sources have referred to as Stargate for China.

The goal is to stitch together server capacity scattered across the country into a unified fabric using Huawei’s UB-Mesh technology. China currently commands only about 15% of the world’s AI computing power, while the United States holds roughly 75%. By consolidating data centers, the plan aims to nudge that balance and accelerate AI services for megacities such as Shanghai, Hangzhou, and Nanjing. The bet is straightforward: orchestration and proximity can lift performance, not just the raw speed of individual chips.

The Wuhu site is just one piece of the puzzle. Similar hubs are being built in Ulanqab (serving Beijing and Tianjin), in Guizhou (for Guangzhou), and in Qingyan (for Chengdu and Chongqing). Older data centers in more remote regions will be deployed to train large language models and serve as backup capacity. A surplus of chips that previously sat idle can finally be put to work—authorities are offering subsidies of up to 30% for their purchase. It’s a pragmatic way to turn excess into throughput.

U.S. export curbs on advanced NVIDIA GPUs have pushed Beijing to accelerate homegrown processors and the supporting infrastructure. Domestic options still trail American counterparts, but China is scaling up and building a dense network of facilities closer to population centers. In a tight contest with the United States, such moves help the country consolidate ground in the AI race. Scale and proximity won’t erase the performance gap overnight, yet they can narrow the distance where it matters most—responsiveness, resilience, and reach.