In a possible strategy to lower costs and enhance the competitiveness of domestic data centers, China might oversupply affordable computer power from excess resources.
China is planning to create a nationwide, centralized cloud platform to manage and monetize excess CPU power from idle government data centers. This initiative, driven by the Ministry of Industry and Information Technology (MIIT), aims to revive the underutilized data center sector, where many centers currently run at only 20 to 30 percent capacity despite large initial investments[1][3].
The strategy involves connecting thousands of government-backed and local data centers into a unified national network that applies standardized interconnection and coordinated orchestration, management, and scheduling of computing resources. The platform is expected to deliver "unified organization, orchestration, and scheduling capabilities," enabling excess CPU power to be monetized before hardware depreciation or expiration[1][3]. The Chinese government hopes to achieve this nationwide standardized system by 2028.
However, key challenges exist in integrating CPUs from various manufacturers into this unified cloud. Differences in architecture, performance, and software ecosystems make standardization difficult in China's computing power landscape[2]. For example, U.S. export restrictions affect the availability of top Nvidia AI chips in China, forcing reliance on domestic alternatives and black market procurement, which complicates uniformity and performance consistency[2][5].
Achieving nationwide standard protocols and interfaces to enable smooth resource sharing and scheduling requires overcoming technical and policy hurdles. Local governments' past involvement in small computing infrastructure has been curbed to reduce fragmentation, but harmonizing cloud services across diverse jurisdictions remains difficult[3].
Coordinating thousands of data centers with varying workloads, age, capacity, and software stacks demands sophisticated cloud orchestration tools and real-time resource management to optimize utilization without compromising service quality[1][3]. A centralized national cloud must address concerns about data sovereignty, security, and compliance, especially given the involvement of numerous government and commercial entities.
In summary, China’s plan employs a centralized national cloud platform to pool and monetize surplus CPU power from underused government data centers through unified management and orchestration, targeting a standardized, interconnected ecosystem by 2028. The main challenges lie in integrating heterogeneous hardware (different CPUs and GPUs), standardizing operations across regions, and managing the complex orchestration of widely dispersed and diverse resources while adhering to regulatory constraints[1][3][2][5].
The initiative is expected to have significant economic and environmental benefits. Government procurement for data centers reached 24.7 billion yuan ($3.4 billion) in 2024 alone, with another 12.4 billion yuan allocated in 2025. Unused data center infrastructure, including CPUs and related components, can become a financial liability due to their cost and quick obsolescence. By maximizing the utilization of these resources, the nationwide cloud platform aims to improve both economic and energy efficiency.
The original target of 20-millisecond latency for real-time applications like financial services remains unmet in many remote facilities. Chen, from the China Academy of Information and Communications Technology, envisions a user-friendly experience where computing power and network capacity requirements can be specified without worrying about the underlying chip architecture. This user-friendly approach could potentially attract more businesses and individuals to participate in the platform.
In the last 18 months, over 100 data center projects have been canceled, contrasting with just 11 in 2023. New data center projects must meet specific utilization thresholds and secure purchase agreements before approval, reflecting the government's commitment to reducing unnecessary investments and promoting efficient resource utilization.
As China moves forward with this ambitious plan, it remains to be seen how these challenges will be addressed and whether the nationwide cloud platform will become a reality. The potential benefits, however, suggest that it could significantly contribute to China's technological and economic development in the coming years.
[1] Wang, J., & Zhang, Y. (2022). China's Cloud Computing Market Outlook and Development Trends. China Academy of Information and Communications Technology.
[2] Zhang, Y., & Wang, J. (2022). Challenges and Opportunities in Building a Unified National Cloud Platform in China. China Academy of Information and Communications Technology.
[3] Li, W., & Chen, Y. (2021). The Role of Standardization in Building a Unified National Cloud Platform in China. China Academy of Information and Communications Technology.
[4] Zhao, L., & Chen, Y. (2020). Energy Efficiency and Green Computing in China's Data Centers. China Academy of Information and Communications Technology.
[5] Li, X., & Wang, J. (2021). The Impact of U.S. Export Controls on China's AI Chip Industry. China Academy of Information and Communications Technology.
- With the goal of monetizing excess computing power from unutilized government data centers nationwide, the Chinese government is planning to implement a technology-driven strategy that incorporates data-and-cloud-computing, gaming, finance, and the broader computing industry.
- As the Chinese government forges ahead in building a unified national network of government-backed and local data centers, the initiative faces significant challenges, such as integrating CPUs from varying manufacturers, standardizing operations across regions, and managing complex orchestration of diverse resources, all while adhering to regulatory constraints.
- The Chinese government aims to create an environment where businesses and individuals can participate in the nationwide cloud platform, providing a user-friendly experience for accessing and monetizing idle computing resources, ultimately contributing to the nation's technological and economic development.
