Shares of GDS Holdings (NASDAQ:GDS) and Vnet Group (NASDAQ:VNET) climbed roughly 8% on Tuesday after reports indicated that China is considering an investment programme worth around 2 trillion yuan ($295 billion) over the next five years to expand the country’s data center infrastructure.
The U.S.-listed shares of the Chinese cloud and data center operators advanced following reports that several government bodies, including the National Development and Reform Commission, are working on a framework to create a nationwide network of interconnected computing hubs, according to sources familiar with the discussions.
One of the sources said that state-backed telecommunications companies, including China Mobile and China Telecom, are expected to operate the majority of the planned facilities. The sources cautioned that the proposal remains at an early stage and that details of the project could still be revised.
The proposed spending programme would mark a substantial increase in China’s data center capacity as Beijing seeks to strengthen the infrastructure required to support the development of artificial intelligence technologies.
The news also lifted other Chinese technology stocks. American depositary receipts of Alibaba gained 0.4%, while Baidu extended its advance to 1.5% as investors responded positively to the prospect of increased investment in digital infrastructure.