China’s newly launched underwater data centre in Hainan is a bold move, but it’s not just about bragging rights. This is a strategic play to upgrade digital infrastructure, capture a bigger slice of global internet traffic, and lure foreign tech giants. Yet, the road to dominance isn’t smooth. The UAE and the US are sprinting ahead, pouring billions into AI-driven data centres, and China’s got to outmanoeuvre them.
The underwater data centre is part of a bigger push to make digital infrastructure a growth engine. But here’s the catch: the Gulf and the US are expanding data centres at breakneck speed. The UAE, for instance, is building the Stargate UAE AI data centre, a massive project tying commercial institutions to a cutting-edge, US-tech-powered ecosystem. Meanwhile, the Trump administration is sealing multibillion-dollar deals to boost chip supplies to the UAE, giving them a serious edge.
China’s challenge is twofold. First, the Gulf’s rapid data centre expansion is a tough act to follow. Second, the US has a clear advantage: its government is taking financial stakes in semiconductor companies and rallying chipmakers to accelerate data centre production. This convergence of investment and supply chain demands, especially with Nvidia leading the charge, puts the US in pole position.
China’s underwater data centre is a step forward, but it’s not enough to secure long-term AI leadership. The country needs more than just innovative infrastructure—it needs to match the scale and speed of its rivals. The race is on, and China’s got to dig deeper, both literally and strategically, to stay in the game.