DeepSeek’s 1-gigawatt (GW) data center project in Ulanqab, Inner Mongolia, signals an escalation in China’s sovereign compute race, shifting the US-China technology competition toward state-backed physical infrastructure. Ulanqab, a region with a population under 2 million, is a critical node under China’s ‘East Data, West Compute’ initiative, launched by the NDRC in February 2022, and already hosts approximately 89 data centers from entities including Apple, Alibaba, Huawei, and Kuaishou. DeepSeek plans to self-build the facility while leasing additional capacity, targeting partial operations by late 2027 or early 2028. A $50 billion cost estimate, cited by Nvidia CEO Jensen Huang as a general benchmark for a 1GW data center, provides a reference but is not DeepSeek’s specific capital expenditure. In June 2026, DeepSeek raised approximately $7.4 billion (50 billion yuan) at a valuation between $52 billion and $59 billion, the largest private AI financing in Chinese history, involving discussions with a Chinese state-backed semiconductor investment fund. The expansion occurs amid export-control scrutiny: the Trump administration alleged DeepSeek obtained Nvidia Blackwell processors, banned from sale to China, for its Inner Mongolia operations. A US official confirmed in February 2026 that DeepSeek trained its latest model on these chips, but the company denied the allegations,