create your own data center

Z.AI has been the protagonist of big headlines in recent weeks, especially after the launch of its very powerful GLM 5.2 language model. Formerly known as Zhipu, the company has now just finished building a massive 1 gigawatt data center that, according to they count from Bloomberg, it will work exclusively with semiconductors made in China. To put it in context, it would be the most ambitious bet yet by a Chinese technology startup to completely dispense with Nvidia.

They can’t buy Nvidia chips. Since January 2025, Z.AI has been on the US Department of Commerce’s entity list, which prevents it from legally purchasing Nvidia chips. The most curious thing of all is that this veto, far from stopping it, has pushed it to build all its future infrastructure relying only on national suppliers, according to they explained from Bloomberg. But it is not at all strange, since it is a movement that fits with Beijing’s strategy of reducing its technological dependence on Washington in the midst of the AI ​​race.

In detail. As shared by the media, the data center has already begun to operate partially and is designed to train and deploy the company’s family of GLM models. With a power of 1 gigawatt at full capacity, from Bloomberg they assure that the facility could consume as much electricity as about 750,000 homes need, making it one of the largest data centers ever built by a Chinese artificial intelligence startup.

For now, the company has installed at least 10,000 chips from China there, although there is no information on what proportion of the total planned capacity that figure represents.

Between the lines. Although the media does not detail which company provides the chips, everything points to Huawei. Z.AI already presented its GLM-5.2 model in June, trained entirely with Huawei Ascend accelerators and without resorting to Nvidia hardware. The model also came out ahead of the rest in rankings of open source models such as Design Arena.

The problem is that, according to they claim Bloomberg, Chinese chips like the Ascend still perform worse per watt than Nvidia’s current Blackwell, which means that one gigawatt of Chinese power is not equivalent, in practice, to the same computing power as one gigawatt consumed with Nvidia hardware.

Added to this is a manufacturing bottleneck. From Tom’s Hardware they point out that SMIC’s most advanced and stable process (equivalent to a 7-nanometer node) is already operating at over 93% of its capacity, and that the shortage of domestically produced HBM memory limits how many accelerators Huawei, which last year shipped around 812,000 AI chips, can assemble.

Bloomberg pointed In addition, citing a previous report, Huawei plans to manufacture about 1.6 million Ascend cores in 2026, enough for about 600,000 chips of its flagship model, the 910C, while Cambricon, another of Nvidia’s major Chinese rivals, has set a goal of half a million accelerators this year. In short: China can build data centers faster than it can make the chips needed to fill them.

sweet moment. The Z.AI thing comes at the height of the pulse among Chinese AI startups. Its great rival, Moonshot, had to suspend new subscriptions to its platform last Sunday to prioritize the computing capacity of its current users, after the launch of his amazing Kimi K3 modelaccording to explained the company itself on social networks.

Z.AI, for its part, is going through a good financial moment. And it is that according to sources consulted by Bloombergthe company is on track to reach $1 billion in annual recurring revenue after meeting its 2026 sales target this month, and has recently bolstered its capital with an IPO in Hong Kong and a subsequent expansion. The company’s shares have closed with an increase of 37% this Tuesdaycoinciding with the news of the new data center.

A more ambitious plan. The Z.AI case is part of a much broader plan by the Chinese Government. And Beijing is preparing an investment of about 2 trillion yuan (about $295 billion) within five years to build a national network of AI data centers, with at least 80% of the technology coming from Chinese suppliers, according to they count from Tom’s Hardware. And in that plan, Z.AI, Moonshot, and the rest of the AI ​​startups that are beginning to deploy their weapons are included.

Cover image | Z.AI and İsmail Enes Ayhan

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