According to a Bloomberg report, China planned to spend $295 billion in the next five years to expand its national data center. That would speed up domestically developed AI.
Chinese government bodies, like the National Development and Reform Commission, will publish a blueprint that interconnects computing hubs nationwide. Telecom firms will be state-owned operators. If investors speculated that the U.S. copied a similar framework, AT&T (T), Verizon (VZ), and T-Mobile (TMUS) would be companies to own.
U.S. firms in the AI space should not ignore the ambitious plan. Chinese tech firms have a history of developing AI solutions at a far lower cost. DeepSeek, for example, not only costs a fraction of that spent by U.S. firms but charges less for its use. DeepSeek V4 general or reasoning models are up to 99% cheaper than OpenAI’s GPT-5.5. That is according to the site, CostGoat.
Companies that want to save money might choose Chinese-based AI models instead. Alibaba’s AI offers free-to-use AI tools. However, it raised prices for its coding plan last month. The increased rates are still lower than those of Anthropic or other popular Western models. But as capital costs rise and AI models consume more tokens, Anthropic and OpenAI will need to increase prices. In a price war, China might have an edge.
When China spends nearly $300 billion to advance its AI development, it will have comparable offerings at a lower subscription price.
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