Telecom ai capex and what are they doing with this capex?
Based on the latest financial reports and infrastructure plans, China's three major telecom carriers are making a strategic pivot away from traditional network spending and towards AI infrastructure. While their total capital expenditure (capex) is declining, the proportion dedicated to AI and computing power is rising sharply.
Here is the breakdown of their 2026 AI capex and what they are building with it:
💰 2026 Telecom AI Capex & Strategic Focus
| Carrier | Total 2026 Capex | AI/Computing Investment | Key Projects & Strategy |
|---|---|---|---|
| China Mobile | RMB 136.6 bn (-9.5% YoY) | Computing +37% of total | 62.4% increase for computing networks; 19.8% for AI networks -1. Building AIDC centers and the "Jiutian 3.0" foundation model -6. |
| China Telecom | RMB 73.0 bn (-9.2% YoY) | Computing 35% of total | 26% increase for computing infrastructure -7. Focusing on "Token-based business" and managing 1.2 GW of AIDC projects -2-7. |
| China Unicom | ~RMB 50.0 bn (-7.7% YoY) | Computing >35% of total | AI revenue grew 140%-3-5. Planning a RMB 51 billion AI hub in Suzhou (30,000 racks) and 7 AIDC parks -10. |
🏗️ What They Are Building with This Capex
The money is being deployed into physical infrastructure to create a "computing network" that rivals the scale of their traditional phone networks. Here is what that looks like on the ground:
1. AI Data Centers (AIDCs) Instead of standard data centers, carriers are building "AIDC" facilities designed specifically for the high-density power and cooling needs of GPUs.
- China Telecom is leading this charge. Management stated that AIDCs will be the "major source of future revenue," with over 20 high-power projects totaling 1.2 gigawatts and contracts exceeding RMB 100 million already in place -7.
- Specific Example: The China Telecom (Jinan) Smart Computing Center involves a total investment of RMB 3.36 billion for its first phase alone, set to deliver 500 PFLOPS of computing power specifically for AI model training and industrial simulation -4-9.
2. Mega-Scale AI Hubs (The "GPU Farms") The carriers are building massive, centralized hubs to host tens of thousands of servers.
- China Unicom's Suzhou Project: The most eye-catching single project is China Unicom’s planned RMB 51.27 billion AI hub in Suzhou. This single facility will house approximately 30,000 standard server racks and cover 93.3 acres -10. For context, this represents a massive bet on future AI demand in the Yangtze River Delta.
3. Vertical Integration (From Chip to Token) Unlike US hyperscalers who strictly sell cloud access, Chinese carriers are building a vertically integrated stack.
- China Mobile is developing its own "Jiutian 3.0" foundation model and 29 industry-specific intelligent agents -1.
- China Unicom is integrating its "Lingxi" platform and accumulating massive datasets (over 400TB) to make the infrastructure useful out of the box -5.
- Shift to "Tokenization": Executives explicitly stated they are moving from a "traffic-based" economy (selling bandwidth) to a "Token-based" economy (selling AI processing power) -2-6.
💡 The Strategic Logic
This shift explains a lot about the earlier questions regarding how Chinese consumers spend on AI. The carriers are not just passive "pipes" for internet traffic; they are building themselves into the AI utility layer-6.
By controlling the hardware (AIDCs), the chips (domestic GPUs), and the billing (phone bill tokens), they are positioning themselves to capture the revenue from every AI query. The 35-37% allocation of capex to AI is the fuel for the "Token as Currency" economy you asked about earlier.
Would you like to dig deeper into the specific types of AIDC projects or the domestic chips powering them?