China Accelerates AI Infrastructure Buildout—On Earth and in Orbit

Jun 11, 2025

(Source iHLS)

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As global competition intensifies over artificial intelligence, a new report highlights China’s sweeping effort to dominate the full AI technology stack—extending far beyond algorithms into hardware, infrastructure, and even outer space.

According to findings published by the Special Competitive Studies Project (SCSP) and Strider Technologies, China is investing heavily in foundational infrastructure to support its AI ambitions. At the heart of this campaign is an expansive network of over 250 high-performance data centers, either operational or in development, spanning across the country.

These facilities are strategically located near energy sources, logistics hubs, and industrial centers. They serve dual roles: training large language models (LLMs) and enabling real-time processing for defense systems, surveillance networks, and government services. Many of these clusters are powered by advanced chips, some domestically produced and others acquired prior to export controls.

But China’s ambitions are not confined to Earth. A bold space-based initiative is now underway. On May 14, ADA Space and Zhejiang Lab launched the first 12 satellites of a planned constellation of 2,800 interconnected systems. These supercomputing satellites are equipped with high-speed laser links and designed to process data in orbit.

This orbital infrastructure could dramatically reduce latency, bypass ground-station bottlenecks, and support operations in military, intelligence, and commercial applications.

While China’s centralized, state-led approach enables rapid scaling and deployment, experts caution it may lead to inefficiencies or stifle private-sector innovation. This contrasts with the more market-driven strategies seen in the United States and its allies.

In the West, private companies continue to lead in model development, hardware innovation, and generative AI deployment.

China’s dual-track approach—expanding AI infrastructure both terrestrially and in orbit—signals a long-term strategic play to shape not only the future of artificial intelligence, but also the geopolitical and military balance it influences.