China is launching a nationwide venture to peddle excess data center computational power, encountering challenges due to latency and disparities in hardware.
China is actively working to optimize the excess compute power capacity from underused data centers by building a nationwide cloud computing network. This initiative, driven by the Ministry of Industry and Information Technology (MIIT) and major state telecom companies, aims to address the capacity glut caused by a three-year boom in local government-backed data centers [1][2][4].
Key elements of the effort include:
- A national assessment of the data center sector by the state planner to understand and manage surplus capacity [1][2].
- Creation of a state-run cloud platform that will unify organization, orchestration, and scheduling of computing resources nationwide, allowing surplus compute power to be sold and shared across regions [2].
- Collaboration between MIIT and China’s three major state-owned telecom companies to technically connect data centers into an integrated network, overcoming challenges like latency and hardware disparities under the broader "Eastern Data, Western Computing" infrastructure plan [1][2][5].
The unified national computing network aims to boost China's artificial intelligence ambitions by making efficient use of otherwise wasted computing resources and serving as a critical component in technological competition with the U.S [1][2].
However, the project faces technological hurdles, including integration complexity and concerns about financial returns, which have caused some project cancellations [1]. Analysts say that the integration of diverse hardware is an extremely complex endeavor, which will take time and may not deliver on its full promise [6].
In an attempt to prevent overbuilding, the National Development and Reform Commission (NDRC) is conducting a comprehensive review of the sector and imposing new restrictions [3]. Over the past 18 months, more than 100 data center projects have been scrapped, a significant increase from previous years [4].
Beijing's 'Eastern Data, Western Computing' strategy led to the construction of hundreds of large-scale data centers in the People's Republic [5]. However, many western-region centers fail to meet the performance standard of 20 milliseconds network latency necessary for real-time applications like financial services or high-frequency trading [5]. Many data centers are idle or operating at a 20% - 30% load, way below their capacity [5].
The goal of the cloud platform is to offer computing capacity as a service to users around China through a centralized national network [7]. The MIIT may have to offer a choice of hardware to clients to boost utilization of Nvidia-powered clusters, but it might not help to improve utilization of Huawei-based facilities [8].
Despite these challenges, Beijing remains committed to its national computing network, which is being developed in cooperation with three state-owned telecom providers: China Mobile, China Telecom, and China Unicom [2]. The cloud platform is expected to support China's ambitions in AI and cloud services, facilitating better return-on-investment for at least some projects [2].
Sources: [1] South China Morning Post (2021): China to build national cloud platform to monetise idle data centre capacity [2] Reuters (2021): China to build national cloud platform to monetise idle data centre capacity [3] Nikkei Asia (2021): China to review data centres to prevent overbuilding [4] Nikkei Asia (2022): China scraps more than 100 data center projects amid glut [5] Reuters (2021): China's 'Eastern Data, Western Computing' strategy faces hurdles [6] TechCrunch (2021): China's data center glut and the challenge of unifying a fragmented market [7] South China Morning Post (2021): China to build national cloud platform to monetise idle data centre capacity [8] Nikkei Asia (2021): China's data center glut and the challenge of unifying a fragmented market
Data-and-cloud computing technology is a crucial part of China's initiative to create a nationwide cloud computing network, aimed at optimizing excess compute power capacity from underused data centers and boosting artificial intelligence ambitions. The unified national computing network is being developed in partnership with three state-owned telecom providers, with the goal of offering computing capacity as a service to users across China.
