As Trump and Xi talk, China surges ahead with its AI ambitions

Across the broad grasslands of Inner Mongolia, farmers are harvesting fat potatoes beside a new set of neighbours: massive, boxy structures that will power China’s AI platforms.

With its steppes and volcanoes, Ulanqab is an improbable digital frontier. For years, it has been China’s official “potato capital”. Now, though, its farmland has also turned into a construction zone for a wave of data centres, as Donald Trump and his Chinese counterpart Xi Jinping meet to discuss AI safety among other things.

Hundreds of workers in yellow helmets haul heavy machinery into the site while welding sparks scatter from metal scaffolding. Overhead, giant cranes carefully assemble rooftops, while men on ladders plaster brickwork.

“This is China speed,” one worker says with a laugh. He describes his country as “an infrastructure maniac” as he walks off, still chuckling. “There is one phase every year. This is the second phase,” says an electrical engineer. “There will be many more phases afterwards.”

Artificial intelligence is at the centre of China’s rivalry with the United States, and the crucial element is the computing power housed in the data centres here.

For the Chinese Communist Party, these facilities are vital to the country’s economic and national security. When completed, they will support its goal of embedding AI across 90% of industries and society by 2030.

China is not only building the physical infrastructure. It is also cultivating talent: young engineers and researchers who increasingly view the country as a place of opportunity, in part because tensions with the US and Trump’s immigration restrictions have dimmed the appeal of the American dream.

“Fewer students and researchers are heading to the US, and more are returning from the US to China. That is very clear,” says Jack Zhang from the University of Science and Technology of China.

He was recruited through a high-level programme after studying at Yale in the US, and Cambridge in the UK.

“I wanted to take some of the AI work I was doing in the lab and apply it to human health and medicine. That requires more resources, more people and sometimes more government support, which can be difficult to access overseas.”

China’s growing AI strength is one reason the US says it cannot afford to pause its own AI development, despite sharp warnings from within the industry that the technology is advancing too quickly.

“Whoever wins AI, wins,” President Trump said last week. Dario Amodei, the CEO of AI company Anthropic, urged the US-led ban on selling advanced chips and equipment to China to remain in place, warning that a Chinese lead would “pose grave danger for the US and the world”.

That is not what Xi will want to hear when he arrives in Washington on Wednesday. The state-run Global Times, which reflects Beijing’s line, brushed aside US concerns as part of a “Cold War playbook” aimed at “contain” China’s rise.

But China is not only trying to catch up with the US.

It is also promoting a different model. Xi himself is urging Chinese AI companies to build cheaper, open-source models, which let people, companies and countries alter them as they choose.

That also sets Chinese models against those in the US, where developers including OpenAI and Anthropic rely on closed-model systems, with design details kept secret.

One reason Beijing backs this approach is that it has worked well for Chinese firms. By sharing the technology, they have been able to innovate rapidly.

That has helped China address one of its biggest obstacles: limited access to advanced chips, which would provide greater computing power.

But Beijing also wants a larger role in shaping the rules that govern AI. Xi has repeatedly called for tighter regulation and a global framework for others to follow.

With concern over AI safety increasing, this week’s summit at the White House is especially important. Can the two sides work together on regulating AI? Is any discussion of slowing down even realistic?

It certainly does not look that way in places like Ulanqab, where China’s AI ambitions are taking form.

China is building hundreds of data centres — for Huawei, ByteDance, DeepSeek — in sparsely populated provinces: Ulanqab, Ningxia and Gansu in the north, Guizhou in the south-west.

It has already developed huge renewable energy capacity — wind and solar — in these areas, where land is cheaper, temperatures are cooler and water demand is lower.

That does not mean there are no worries or drawbacks. China wants most of its data centres to run on green energy by 2030, but parts of its grid still rely on coal power. Water supply is still a concern in the dry, arid parts of Inner Mongolia.

Entire villages have been moved, though it is difficult to determine the number or what compensation residents received. Few people are willing to talk about it, because speaking too openly can be dangerous.

“This big data has absolutely nothing to do with ordinary people,” says one local, speaking anonymously off camera. “What benefits has it brought us?”

He says few locals have found jobs there. Others told us they feared their land would be taken and they would no longer be able to farm for a living.

But there are also optimists, including a man who said his surname was Zhang, standing beside potato pickers in a field near the data centres.

“China is now at the forefront of the world,” he says, adding that his children have managed to find jobs there.

“It’s not like the 1960s, when it was relatively backward. China is doing alright now. Whether in economic development or other areas, it is doing well.”

Surveys seem to indicate that there is little resistance to AI or its broad adoption, compared with many other countries, though it is difficult to assess these figures in such a heavily censored environment.

Beijing has made clear that it sees AI as a solution to its ageing workforce, and it is rapidly automating manufacturing and production. That is creating anxiety about job losses, which, again, is hard to measure.

But this is also a country producing around five million science and tech graduates every year, compared with around half a million in the US.

And as more of them remain in China, they are finding a growing ecosystem for innovation.

AI developer Dang Ronghao, 27, who works for a leading tech company, says Chinese campuses are becoming more open, allowing him to speak with researchers around the world from his base in Shanghai.

“I’ve seen research combining AI with nuclear fusion, AI with astrophysics, AI with new materials, and AI with the development of new drugs. I think we are entering a good era.”

Even so, some say China still values conformity more than challenge. “It’s not as open as I wish,” says Professor Liu Jun, Department of Statistics and Data Science at Tsinghua University. He has taught at both Harvard and Stanford.

“I keep encouraging students here to ask more questions, to challenge more, but that’s hard to change. I think partly it’s culture, partly it’s the system.”

Far from the labs where Prof Liu and others are wrestling with the AI frontier, many Chinese people are still dealing with more immediate economic problems: a sluggish economy, rising youth unemployment, low spending and property prices that have fallen sharply. In rural areas, an ageing population is also becoming a bigger concern.

“Big data and all that… pretty good – but it has nothing to do with me,” says one farmer in Inner Mongolia, as he rides a cart to check on his sheep.

He says he has no use for AI. He barely even uses the internet.

The screen on his phone is broken, and his wifi comes from a pocket dongle that costs him just over 40 yuan a month.

“There haven’t really been any changes for me. I don’t know about the future,” he says.

That kind of scepticism can pose a challenge for Beijing.

So much is changing here and across the country, but it is hard to know how many people are as committed as their leaders to this tech-driven future.