Table of Contents
The DC market in China will expand at a CAGR of 8.94%, as demand for digital infrastructure continues to scale across key hubs such as Beijing, Shanghai, and Guangdong
In sum – what to know:
AI-driven demand – Rapid AI adoption is accelerating the need for high-density, GPU-enabled data center infrastructure.
Hyperscaler expansion – Global and domestic cloud providers are scaling capacity across major hubs to capture growing enterprise demand.
Sustainability push – Stricter efficiency standards and renewable energy targets are reshaping how new facilities are designed and operated.
China’s data center market is entering a new expansion phase, driven by accelerating AI adoption, cloud growth, and rising hyperscaler investment, according to new research from Arizton Advisory & Intelligence.
The firm forecasts the Chinese data center market will reach $101.47 billion by 2031, growing at a CAGR of 8.94%, as demand for digital infrastructure continues to scale across key hubs such as Beijing, Shanghai, and Guangdong.
According to the report, growth is being fueled by increasing enterprise migration to the cloud and the rapid rise of AI workloads, which are driving demand for more advanced, high-capacity facilities. Major cloud providers including Amazon Web Services, Alibaba Group, Microsoft, Google, and Tencent are continuing to expand their infrastructure footprint in the country to capture this demand.
The report also highlights a growing shift toward AI-ready data center infrastructure, with operators investing in higher power densities, GPU-based compute, and advanced cooling systems to support increasingly complex workloads.
At the same time, partnerships and joint ventures are becoming more common in the Chinese market, as operators and technology firms collaborate to accelerate buildouts and deploy large-scale AI-focused campuses in emerging regions such as Xinjiang and Qinghai, the report added.
Sustainability is also becoming a central factor shaping the Chinese data center market. Government regulations are tightening, requiring new facilities to meet strict energy efficiency standards, including power usage effectiveness (PUE) targets of 1.4 or lower, alongside a gradual transition toward near-100% renewable energy usage by 2032.
Despite strong growth prospects, the report added that regulatory requirements remain a key consideration. Operators must secure Internet Data Center (IDC) licenses to provide services, adding complexity to market entry and expansion strategies.
Overall, China’s data center sector is evolving toward larger, more efficient and AI-optimized infrastructure, with cloud providers and local operators scaling investments to meet rising demand across industries.
Lian Jye, chief analyst at Omdia, recently told RCR Tech that China’s position as the world’s largest AI adoption market is pushing significant investment in data centers, compute clusters, and domestic accelerators.
“China’s AI infrastructure market is characterized by immense scale, driven by its position as the world’s largest single market for AI adoption in consumer and enterprise applications,” Jye said.
Government policy remains a central force in China’s AI infrastructure expansion. National programs such as the “East Data, West Computing” initiative are designed to distribute compute workloads across regions with abundant power and land resources, the analyst said.
Major cloud providers and telecom operators are also central to this strategy. According to Jye, these companies are building AI infrastructure across the entire technology stack, from chipsets and data centers to AI platforms and enterprise applications.
Looking ahead, the Omdia analyst said opportunities will come from emerging generative AI use cases, including embodied intelligence and the adoption of agentic AI across industries.
However, risks remain. Overbuilding data center capacity, continued chip shortages due to export controls, and broader geopolitical tensions could affect returns on AI infrastructure investments in the Asian nation, according to the analyst.
