China is preparing a sweeping five-year investment plan to expand the country’s artificial intelligence infrastructure, according to people familiar with the matter. The initiative, expected to total about 2 trillion yuan, or $295 billion, would support a nationwide network of AI data centers and deepen Beijing’s effort to compete with the United States in advanced computing.

The plan is being developed by major government bodies, including the National Development and Reform Commission, the people said. Officials are drafting a framework for a connected system of computing hubs spread across the country, rather than isolated facilities built by separate operators.

State-owned telecom companies are expected to play a central role. China Mobile and China Telecom would operate most of the facilities and help link them into a broader national system, one of the people said. The approach suggests Beijing wants greater coordination over where AI infrastructure is built and how it is used.

The project also appears designed to support domestic suppliers. The people said the government wants at least 80% of the technology used in these centers, including AI chips, to come from local companies such as Huawei Technologies. That would reduce the role of US chipmakers Nvidia and Advanced Micro Devices, which have been dominant suppliers in global AI hardware.

The planned buildout reflects China’s determination to reduce dependence on foreign technology at a time when AI has become a strategic priority. Data centers are a foundational part of that strategy because they provide the computing power needed to train and run large AI models. By expanding this infrastructure across the country, Beijing aims to strengthen the domestic AI ecosystem and create a more self-reliant supply chain.

The timing also highlights the intensifying technology competition between China and the US. Both countries are investing heavily in the computing capacity needed for AI, but their strategies differ. While American firms are leading much of the commercial AI boom, China is leaning on state coordination and domestic industrial policy to close the gap.

The scale of the proposed spending underscores how central AI has become to China’s economic and strategic planning. A $295 billion commitment over five years would represent one of the largest public-backed infrastructure pushes tied to AI anywhere in the world.

The report did not indicate when the blueprint would be finalized or when construction would begin. But the outlines of the plan point to a long-term effort to build a more integrated and domestically supplied AI foundation, with the state and its telecom champions at the center.

If carried out, the initiative could reshape China’s data center industry and shift more of the country’s AI workload onto homegrown technology. It would also add another front to the broader race for AI leadership, where access to chips, energy and large-scale computing capacity has become increasingly important.