Z.ai Activates 1-Gigawatt Data Center Using Only Chinese-Made Chips

Beijing, China — Chinese AI developer Z.ai (formerly Zhipu) has completed construction of a 1-gigawatt (GW) data center stocked exclusively with domestically manufactured chips and has partially activated the facility, Bloomberg reported Monday, citing a person familiar with the matter.

The facility will be used to train the company's GLM model family. According to the source, Z.ai has now built or operates several computing clusters, each containing more than 10,000 chips. A gigawatt of electricity is sufficient to power approximately 750,000 homes, placing this site among the largest ever established by a Chinese AI lab.

Chip Supplier and U.S. Restrictions

The source did not name the chip supplier, but Z.ai's recent training history points to Huawei. In June, the company released GLM-5.2, an open-weight model reportedly trained entirely on Huawei Ascend accelerators with no Nvidia hardware involved. The model topped open-weight leaderboards within a week of release.

Z.ai has been on the U.S. Commerce Department's entity list since January 2025, which blocks legal access to Nvidia silicon and leaves domestic components as its only viable supply chain.

Performance Considerations

Raw power capacity alone does not tell the full story. Chinese accelerators, such as Huawei's Ascend line, trail Nvidia's current Blackwell parts in performance per watt. As a result, a gigawatt of domestic silicon delivers less usable training compute than a gigawatt consumed by Nvidia-based systems.

Broader Industry Context

• National AI Infrastructure Plan: Beijing is drafting a plan to spend approximately 2 trillion yuan ($295 billion) over five years on a nationwide grid of AI data centers, with at least 80% of underlying technology sourced from Chinese suppliers.
• Supply Constraints: Filling these facilities remains a major challenge. SMIC's most advanced stable node — the roughly 7nm-class N+2 process — is running at over 93% utilization.
• HBM and Huawei Production: Scarce domestic HBM limits how many Ascend-class accelerators Huawei can assemble. Huawei shipped approximately 812,000 AI chips last year.
• Capacity vs. Production: China can build a 1GW shell much faster than it can produce the chips needed to draw that amount of power.

Competitor and Financial Developments

• Moonshot, a rival AI firm, suspended new subscriptions on Sunday, stating in a social media post that it wanted to prioritize compute for existing members following the launch of its Kimi K3 model.
• Z.ai is on track for $1 billion in annual recurring revenue, having reached its 2026 sales target in July. The company recently raised billions of dollars through a Hong Kong IPO and a follow-on share sale.

Unconfirmed Details

The source did not disclose the data center's location, its cost, or its construction timeline.

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