China built hundreds of AI data centers to catch the AI boom. Now many stand unused.

A year or so ago, Xiao Li was seeing floods of Nvidia chip deals on WeChat. A real estate contractor turned data center project manager, he had pivoted to AI infrastructure in 2023, drawn by the promise of China’s AI craze.

At that time, traders in his circle bragged about securing shipments of high-performing Nvidia GPUs that were subject to US export restrictions. Many were smuggled through overseas channels to Shenzhen. At the height of the demand, a single Nvidia H100 chip, a kind that is essential to training AI models, could sell for up to 200,000 yuan ($28,000) on the black market.

Now, his WeChat feed and industry group chats tell a different story. Traders are more discreet in their dealings, and prices have come back down to earth. Meanwhile, two data center projects Li is familiar with are struggling to secure further funding from investors who anticipate poor returns, forcing project leads to sell off surplus GPUs. “It seems like everyone is selling, but few are buying,” he says.

Just months ago, a boom in data center construction was at its height, fueled by both government and private investors. However, many newly built facilities are now sitting empty. According to people on the ground who spoke to MIT Technology Review—including contractors, an executive at a GPU server company, and project managers—most of the companies running these data centers are struggling to stay afloat. The local Chinese outlets Jiazi Guangnian and 36Kr report that up to 80% of China’s newly built computing resources remain unused.