Semiconductor research firm SemiAnalysis published a report on Chinese AI infrastructure on September 25. By its modeling, China has delivered 24GW of data center capacity so far, based on data covering more than 60 operators and over 1,000 facilities.
That figure already exceeds Europe, the Middle East and Africa (about 14GW) and Asia-Pacific outside China (about 15GW), putting China second globally behind only North America. The US comparison figure is roughly 56GW by the end of 2026. On the pipeline side, the report estimates China has about 20GW with delivery timelines already scheduled, plus another 30GW or so still at the announced stage.
From retail colocation to wholesale AI buildings
The report's central theme is a shift in market structure. China's data centers used to be dominated by carrier-led retail colocation, where a single customer would lease a few racks. Now, almost all new AI demand is arriving as wholesale deals for entire buildings or entire campuses.
The contrast between the two models is stark. According to the report, wholesale AI buildings have utilization above 70%, versus around 60% for legacy retail racks; retail rack utilization has meanwhile slid from around 75% in 2010 to around 55% in 2022. In the first half of this year, GDS and VNET together signed 1.3GW of wholesale orders, while their combined retail orders came in under 10MW.
The report argues that a swath of previously underrated legacy retail facilities are now being retrofitted into AI clusters through power upgrades and liquid cooling. Old racks are sitting empty even as AI compute remains in short supply — both conditions exist at once.
ByteDance accounts for a fifth
On the demand side, ByteDance stands out the most. The report estimates ByteDance accounts for roughly a fifth of China's delivered data center capacity, and does so almost entirely through leasing rather than building its own facilities. From 2024 through this year, about a third of ByteDance's and Alibaba's combined orders have gone to GDS and VNET.
Construction speed has also compressed. A standard 100MW data center now takes about 12 months from groundbreaking to delivery, down from 18 months previously; pre-construction approvals in China take roughly 3 to 6 months, versus 12 to 13 months in the US. On siting, China's "East Data, West Computing" initiative is steering new capacity toward resource-rich inland regions, with Inner Mongolia emerging as the country's largest AI compute hub — one the report says can compete on return on investment with options in Southeast Asia.
Doing the math: cash flow at the three tech giants
Where the money comes from is the most direct set of numbers in the report. Combined capital expenditure at Alibaba, Tencent and Baidu reached about $20 billion in the second quarter of 2026, double the year before; all three posted negative free cash flow at the same time.
Do the rough math: $20 billion in a single quarter annualizes to roughly $80 billion. The operating cash flow the three companies built up over years from advertising, gaming, e-commerce and cloud is now essentially being consumed by capex within a single quarter, with more going out than coming in. For comparison, prior CocoLoop coverage put Tencent's AI capex alone at RMB 52.8 billion, while ByteDance's reported 2026 AI budget is around $30 billion — and ByteDance isn't even included in that $20 billion figure above.
The report's summary doesn't break down how much of this spending went to chips versus rent and electricity, and the three companies don't report using consistent methodology in their earnings. How long the negative free cash flow lasts depends on how fast AI-related revenue ramps up, and none of the three has given a clear timeline for payback.
Worth noting: 24GW is SemiAnalysis's own model-based estimate, not an official statistic. Chinese official figures tend to use "standard racks" and "aggregate compute capacity" as units, which don't convert directly to this measure — readers citing the number should note whose methodology it comes from.
Sources: SemiAnalysis China AI infrastructure report, CocoLoop; capacity, order, utilization and capex figures follow SemiAnalysis's own modeling methodology.