China Drafts a $295 Billion, Five-Year Plan to Build a National AI Grid — and Lock Out Nvidia and AMD

China is drafting one of the most ambitious state-directed technology programs in its history: a plan to spend roughly 2 trillion yuan — about $295 billion — over the next five years building a nationwide network of interconnected AI data centers. The blueprint, reported by Bloomberg and led by the National Development and Reform Commission, would stitch the country's compute into a single national grid aimed at closing the AI gap with the United States.

The most consequential detail is not the headline number but a procurement rule buried inside it. The plan would require at least 80% of the core technology — AI chips very much included — to come from domestic suppliers such as Huawei. In practice, that would effectively lock Nvidia and AMD out of the buildout entirely, turning a financing program into an industrial-policy weapon for forcing self-sufficiency in the one component China still cannot make at the frontier.

The facilities would be operated largely by state telecom giants China Mobile and China Telecom and run as a coordinated national system rather than a patchwork of independent sites. Funding would come from a mix of sovereign debt — including ultra-long-term special government bonds — state strategic-industry funds, bank loans, and private capital. The data-center push is itself one strand of a broader "Six Networks" program spanning water, power, and computing infrastructure that could ultimately exceed 5 trillion yuan.

For all its scale, the plan also underlines how far ahead American hyperscalers are on raw spending. The $295 billion is spread across five years; by comparison, US firms led by Meta and Microsoft earmarked roughly $725 billion for AI in a single year. China's figure also excludes the enormous private outlays of Alibaba and Tencent, so the true gap is murkier than a straight comparison suggests — but on government-directed capital alone, Beijing is pacing itself very differently from Silicon Valley's all-at-once capex surge.

One important caveat: the program is still a draft. Bloomberg's sources describe a blueprint under discussion, and the specifics — the total, the domestic-content threshold, the timeline — could shift before anything is finalized. But the direction of travel is unmistakable: China intends to build its AI base on its own silicon, even if that means a slower, more expensive path to get there.