Beijing is moving to have state firms like China Mobile and China Telecom operate the majority of data centers and interconnect them, with a goal of sourcing at least 80% of technology from domestic suppliers such as Huawei, reducing reliance on Nvidia and AMD.

A government blueprint for interconnected computing hubs across China is being drafted by key agencies, including the National Development and Reform Commission.

The plan aims to expand domestic AI chips and lessen dependence on American chips, even as limited U.S. relief allows some Nvidia shipments and domestic security reviews affect homegrown Chinese vendors.

Analysts and policy catalysts have combined with favorable ownership structures to drive a surge in the related stock.

Jefferies reiterated a Buy rating with a target around 24.79, noting an unprecedented wave of gigawatt-scale orders from leading cloud providers in early 2026.

The stock rally echoed a broader sector move, with peer data-center stocks in the U.S. rising on the same China data-center investment news.

Private players like Alibaba and Tencent are not initially included in the 2-trillion-yuan figure, but private investment is expected to contribute beyond it.

Bloomberg’s reporting places the plan within global AI investment trends, noting substantial 2026 spending by U.S. firms to advance AI capabilities.

The investment fits Beijing’s Five-Year Plan through 2030 and the broader Six Networks initiative to build national AI infrastructure.

Supportive factors for VNET include potential government-led capital inflows, strong first-quarter execution, and a strategic CATL-backed investor holding a sizable stake.

The plan contemplates about 2 trillion yuan over five years to build a nationwide network of interconnected data centers, potentially expanding to include grid integration and pushing total investment above five trillion yuan.

Market reaction saw GDS Holdings and VNET Group shares rise in anticipation of the plan, reflecting investor confidence in a state-led AI infrastructure push.