Inner Mongolia's 'potato capital' Ulanqab turns farmland into AI data-centre hub
China's 'potato capital' Ulanqab in Inner Mongolia is rapidly transforming farmland into AI data centres, with 109 computing-centre projects signed. The boom has brought compensation for farmers and new livelihoods, but raises questions about water sustainability in a drought-prone region.
On the windswept plains of China's Inner Mongolia, potato farms are making way for sprawling AI data centres. Ulanqab, a city dubbed China's 'potato capital' with annual potato output approaching 4 million tonnes, is emerging as a major hub for the computing power driving the country's artificial intelligence ambitions.
State news agency Xinhua reported in October that Ulanqab has signed 109 computing-centre projects. As of August, AI-focused computing accounted for more than 90 per cent of the city's total computing capacity. On Oct 16, President Xi Jinping visited the city's Chahar High-Tech Development Zone, a major data-centre hub housing facilities operated by tech giants including Huawei, Alibaba and Apple, and called for closer coordination between computing, electricity and water resources.
For farmer Zhang Zhiyong, 64, the transformation began about two years ago when developers approached his village Shengjiaying for land. He received more than 200,000 yuan (US$30,000) in compensation for giving up about 0.7ha of his more than 1.3ha of farmland. He now grows potatoes on just one mu (about 670 sq m), renting out most of his remaining farmland to other farmers. Although the compensation means he could afford to stop working, Zhang has no intention of quitting.
Ulanqab's rise as a computing hub is driven by national policy, geography and climate. The city is part of China's 'East Data, West Computing' strategy, which seeks to shift computing workload from developed eastern regions to western areas with greater land and energy resources. Situated about 350km northwest of Beijing, Inner Mongolia's abundant wind and solar resources offer opportunities to power data centres with renewable electricity, while its relatively cool climate reduces the need for energy-intensive cooling.
Big-data enterprises used 1.54 million cubic metres of water in 2025, equivalent to just 0.33 per cent of the city's total consumption, according to the municipal water bureau. Cooling technologies help: UCloud's data centre uses air-cooled chillers and chilled water circuits, reducing water consumption by some 92 per cent compared with conventional methods. However, municipal water bureau director Yang Yong told Chinese media in late October that 'the pressure on water resources relative to the region's carrying capacity cannot be overlooked'.
The building boom has brought brisk business for food hawkers. Gao Lina, 46, sells about 100 portions of pork rib rice a day at the Bayin data-centre cluster. 'As long as they keep building, there will be workers coming here to eat,' she said. At Yiwutang, another cluster, a vendor said his customer base had shifted from construction workers to engineers as facilities neared completion.
