WASHINGTON — China’s campaign to lead the world in artificial intelligence is being driven by a tightly coordinated effort between state and private sectors — and increasingly, that effort is reaching into space.
A new report titled “China’s AI Infrastructure Surge,” released May 29 by the Special Competitive Studies Project and the intelligence firm Strider Technologies, describes a sweeping, state-led initiative to build out the physical backbone of AI dominance: massive data centers across the country, with plans that now stretch beyond Earth’s atmosphere.
The report says China has built or announced more than 250 AI-focused data centers nationwide. These facilities, packed with high-performance processors and immense power capacity, are the engine rooms for AI systems, handling the heavy computing loads required to train and run large-scale models. The Chinese government is coordinating this infrastructure expansion across national ministries and local authorities, according to the report, ensuring that AI development supports both economic and military goals.
“The PRC is executing a state-directed campaign to dominate global artificial intelligence,” the report states, pointing to AI as a linchpin for China’s broader ambitions in tech leadership and military modernization.
The Special Competitive Studies Project is a non-profit group that supports U.S. long-term strategy in emerging technologies. Strider Technologies specializes in turning open-source information into security insights using AI.
Data centers, from Earth to orbit
As China builds out this infrastructure at home, it’s also preparing to deploy AI capabilities in orbit. Beijing is exploring the use of satellites equipped to function like data centers — capable of storing, processing and analyzing information in space. The aim is to move data processing closer to the point of collection, allowing satellites to make decisions autonomously and respond faster without having to send data back to Earth first.
The idea is gaining traction in both public and private sectors. Former Google CEO Eric Schmidt, now chief executive of space startup Relativity Space, has said he plans to deploy computing infrastructure in space as part of his vision for the future of AI.
China is already moving on this front. On May 14, the Chinese startup ADA Space and Zhejiang Lab launched the first 12 satellites of a planned supercomputing network of 2,800. These satellites are interconnected by high-speed laser links and aim to demonstrate the feasibility of shifting AI processing into orbit.
Christopher Gragg, an intelligence analyst at Strider, said this space-based expansion is directly supported by the growing domestic data center network. “These investments are absolutely supporting those space efforts,” Gragg told reporters during a Defense Writers Group briefing.
He noted that the AI data centers are strategically clustered across China, often in regions tailored to specific industries. This, he said, allows for experimentation with other forms of remote data infrastructure, including deep-sea data centers.
U.S. trying to block path
Washington has responded to China’s rapid AI buildout with export controls aimed at cutting off access to advanced semiconductors. In particular, the U.S. has restricted sales of Nvidia’s most powerful AI chips to China, citing concerns about their potential military applications. Both the Biden and Trump administrations have taken steps to prevent China from acquiring not only high-end chips, but also the tools and know-how to manufacture them.
Still, analysts say these measures may not be enough to derail Beijing’s ambitions.
“It is becoming increasingly clear that the traditional economic toolkit that we have in the U.S. government is not fit to the current reality of how businesses operate, how technology is diffused and how people move, or how ideas are shared,” Greg Levesque, CEO and co-founder of Strider Technologies, told the Defense Writers Group.
He said that while there are clear attempts to curb China’s technological rise, those efforts are also motivating China — and other nations — to get more innovative. “We need to have better and more dynamic intelligence monitoring of trade flows and where this technology is going,” he said. “We probably need to get away from slapping entities on lists and just simply making announcements that companies can’t do this anymore, because the ability to obfuscate ownership and create shell companies to still get at the underlying core technology is pervasive.”
The competition extends to human capital as well. Levesque said his firm has observed “a massive uptick in Chinese government recruitment of AI scientists in the United States” as part of Beijing’s broader AI strategy, while arguing that “the U.S. government has no real clear mission or strategy around mitigating that.”
The Trump administration has announced restrictions on visas for Chinese students seeking to study at U.S. universities, though Levesque suggested this reflects outdated thinking.
“That’s a model and approach that is reflective of the current toolkit, and we need to get creative and imagine other ways to approach this,” he said, noting that this new report highlights the scale of the challenge facing U.S. policymakers as they seek to maintain America’s technological edge in an era of intensifying great power competition.
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