DeepSeek Unveils 1GW Data Center Plans in Inner Mongolia

DeepSeek, a Chinese AI company, is planning to build a massive 1 gigawatt (GW) data center in Inner Mongolia by 2028. This enormous facility will be roughly equivalent in output to a nuclear power plant and consume more power than many mid-sized cities. The construction of the data center marks an expansion of DeepSeek's existing regional strategy, which began with deployments of its models in Hohhot's New District in February 2025.

The new data center will provide the compute backbone for training and running DeepSeek's V4 AI model at scale. The company is simultaneously developing this model, which is expected to be a major advancement in AI capabilities. However, it's worth noting that the project has no direct connection to cryptocurrencies or digital assets.

The 1GW data center will also increase demand for high-end GPUs, leading to concerns about the GPU supply chain. This development is reminiscent of the Jevons paradox, where increased efficiency leads to increased consumption rather than decreased usage. DeepSeek's R1 model demonstrated this phenomenon in January 2025, prompting investors to reassess their expectations and leading to a substantial market reaction.