China Eyes Procuring Over 100,000 Nvidia Chips To Power Remote AI Hub In Gobi Desert: Report

Nvidia stock could be in the spotlight after a report said Chinese companies were planning to deploy the company’s artificial intelligence (AI) chips to power a raft of data centers located across the country’s western deserts.

A Bloomberg report, citing its analysis of investment approvals, tender documents and company filings, said data center operators from Xinjiang plan to set up these high-performance computing (HPC) processors, numbering 115,000, in a single compound.

Xinjiang is an autonomous Chinese territory located in northwest China, which comprises vast areas of deserts and mountains. The report stated that construction continues in the Yiwu County, a region on the edge of the Gobi Desert, located in Xinjiang, which has access to a vast supply of both renewable energy and coal. 

If the efforts prove fruitful, the complex could be used to train foundational large language models (LLMs), such as those developed by the Chinese AI startup DeepSeek.

When DeepSeek unveiled the first of its reasoning models in January, U.S. stocks with AI exposure sold off sharply.

According to the report, despite the massiveness of the proposed data center complex, its scale of AI infrastructure would be far less than that in the U.S. 

The proposed plan could prove to be a positive for Nvidia stock, which currently traded just shy of its July 3 all-time highs of $160.98. Nvidia is currently the most valued global company, boasting a market cap of $3.90 trillion.

The size of the planned data center complex could ruffle the feathers of Washington, D.C., which has been using chip restrictions to keep HPC chips out of China's hands. U.S. chip giants such as Nvidia and AMD have been using workaround chips to sidestep the ban in place.

Beijing, meanwhile, has gone all out to reduce its technology reliance, with the Xi Jinping administration aiding companies involved in advancing AI research. 

Not many who were privy to the U.S.-China chip curbs were aware of the Xinjiang project, Bloomberg said, citing its investigations. They weren’t aware of an illicit trade network sophisticated enough to procure chips in volumes being speculated and direct the hardware to a centralized location. 

The media outlet also clarified that it hasn’t found any evidence that China has already amassed or can procure 115,000 banned Nvidia chips. It also couldn’t confirm that the smaller volume of restricted chips that the U.S. officials believe were in the country have been directed to this centralized location.

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