Chinese AI Models Lead Token Usage Rankings, DeepSeek Takes Top Spot

DeepSeek, a Chinese artificial intelligence company based in Hangzhou, has announced plans to construct a large data center in Inner Mongolia. This mega-center is estimated to have a computational capacity of one gigawatt and aims to increase the company's infrastructure to compete in the global AI market.

Project Details and Timeline

The undertaking will be established in Ulanqab, a city located approximately 350 kilometers northwest of Beijing. The plan includes both the creation of its own structure and the acquisition of additional capacity from other corporations. DeepSeek aims to begin some operations by the end of 2027 or early 2028.

Context of the AI Capacity Race

This initiative is part of the global competition for computing power dedicated to artificial intelligence, where both American and Chinese companies are increasing their investments in large-scale data centers. DeepSeek seeks to consolidate its position after gaining recognition for developing AI models that require fewer computational resources.

Scale and Technological Infrastructure

The construction of this complex in Inner Mongolia ranks among the largest computing infrastructure projects linked to a Chinese AI company. An installation with a 1 GW capacity would surpass all operational AI data centers in the country, although it remains below American projects reaching capacities of 3 GW and 5 GW.

DeepSeek's scheme allows for the combination of proprietary facilities with leased space in third-party managed structures. Sources familiar with the matter indicate that more than ten companies already have planned projects in Ulanqab, as compiled by an independent source based on local government approvals.

Although the specific chip to be used has not been specified, Nvidia semiconductors are considered the dominant standard for data centers in the AI sector, while Huawei stands out as the main Chinese manufacturer in this area.

Geographical Advantage and Company Strategy

The choice of Ulanqab was motivated by the region's climatic conditions. With an average annual temperature close to 4 degrees Celsius, the location reduces the energy demand required to cool high-consumption servers, an attractive factor for companies wishing to operate large computing structures.

DeepSeek's expansion comes after the company gained international visibility by presenting AI models that, according to the company itself, demonstrated superior performance using fewer computational resources compared to its competitors. The strategy also included the development of open-source and low-cost services.

Global Dispute and Geopolitical Attention

This advancement has placed the startup at the center of the technological dispute between China and the United States. Giants like OpenAI and Anthropic have invested billions of dollars in computing capacity, while Chinese groups such as Moonshot, Z.AI, Alibaba, and MiniMax are also seeking to expand their share in the sector.

DeepSeek's move occurs in an environment of growing geopolitical scrutiny. US authorities have raised suspicions that the company may have circumvented export restrictions by using Nvidia's Blackwell processors in a facility in Inner Mongolia, according to sources close to the matter.

Additionally, OpenAI and Anthropic have accused the Chinese startup of practicing a method called distillation, where results generated by existing AI models would be used to enhance new technologies.

Financial Status and Market

The company has also begun preparations for a potential Initial Public Offering (IPO), potentially filing the application this year, as previously reported by Bloomberg News. Previously, the company had raised $7 billion, reaching an approximate valuation of $50 billion.

The construction of a data center of this magnitude also demonstrates the rising financial capacity of Chinese companies to invest in AI infrastructure. A 1 GW complex equipped with advanced accelerators, according to an estimate cited by Nvidia CEO Jensen Huang, could require about $50 billion in investment.

Despite the size of the project, data center costs vary depending on technology and location. AI-focused structures in China generally present lower values than equivalents installed in the United States.

Artificial intelligence has become one of China's new export directions, and the country is leading this race by developing more efficient, low-cost, and open-source models.

There is a trend where American companies are beginning to switch to Chinese AI solutions. Furthermore, the rest of the world is moving in the same direction.