ByteDance is investing 4.5 billion yuan (about US$614 million) in a new computing centre in Datong, Shanxi province, to enhance its AI capabilities. The Volcano Cloud Taihang Computing Centre II Phase project, covering 205,013 square meters, will include multiple data centre buildings and support infrastructure. With Doubao's user base reaching 51 million, ByteDance is expanding its AI presence despite challenges like US semiconductor restrictions. The centre aims to boost the local big data industry, with significant investments projected for 2024.
ByteDance, the innovative parent company behind TikTok and Douyin, is making a significant leap forward by investing 4.5 billion yuan (approximately US$614 million) in a cutting-edge computing centre located in Datong, a city in northern Shanxi province. This strategic move is part of ByteDance's commitment to enhancing its computing capabilities, particularly to support its popular artificial intelligence (AI) services.
The technology leader is rapidly expanding its presence in the AI landscape. Its ChatGPT-like service, Doubao, has quickly risen to prominence, becoming one of the top AI platforms in China. Recently, ByteDance announced updates across a variety of AI models and products, further solidifying its position in this competitive market.
The Shanxi government has officially approved the Volcano Cloud Taihang Computing Centre II Phase project, which will be operated by ByteDance's Volcano Cloud (Datong) Technology. This ambitious project will span an impressive 205,013 square meters (2,206,742 square feet)—an area comparable to nearly 30 football fields—demonstrating the scale of ByteDance's investment in future technologies.
The development will feature six two-storey data centre buildings, a six-storey integrated facility, and various supporting infrastructures. It is designed to accommodate a remarkable 15,604 12-kilowatt server cabinets alongside 510 network cabinets. In July, the provincial government released a comprehensive blueprint for this transformative initiative.
High-performance computing centres play a vital role in training large language models (LLMs) and managing extensive data processing, which is essential for the scalability and efficiency of AI-driven services. Despite facing challenges like US export restrictions on advanced semiconductors, Chinese tech companies are creatively utilizing local chip technologies to boost their computing capabilities.
Doubao's popularity continues to soar, boasting 51 million active users. However, ByteDance has yet to announce any monetization plans for this AI service, even though the training of LLMs incurs substantial costs.
The computing centre will be situated in Guangling county’s Economic Development Zone Big Data Park in eastern Datong. While this area may not be the most economically developed in the province, it has been actively working to promote its big data industry in recent years.
According to local government documents, the first phase of this ambitious project involves an investment of around 2.8 billion yuan. This initial phase includes four data centre buildings and supporting facilities, with construction having commenced in May 2023 and nearing completion.
ByteDance established Volcano Cloud (Datong) Technology in December 2022, with registered capital of 2.36 billion yuan, as reported by Tianyancha, a Chinese corporate data tracker. Additionally, the company acquired over 13 hectares of land in Guangling for 59.12 million yuan, according to data from China’s Ministry of Natural Resources.
Shanxi, which has historically been known for its coal industry, is now focusing on bolstering its big data sector. Notably, Datong ranked third in the country last year for computing power, as indicated by the China Academy of Information and Communications Technology’s Computing Power Index, following Langfang and Zhangjiakou in Hebei province.
Local media reported that by 2024, the Volcano Taihang Computing Centre is projected to have accumulated investments of 1.4 billion yuan, representing a remarkable 89.4 percent of the industrial investment in the Guangling Economic Development Zone. This investment not only showcases ByteDance's commitment to innovation but also highlights the region's potential for growth in the tech sector.
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