- Gongshu targets 7.5 eflops capacity in 2026
- AI industry expected to generate 100 billion yuan by 2035
Hangzhou’s Gongshu district unveiled an action plan to build a “China Computing Valley” on April 29, setting capacity and industry targets as the city accelerates its bid to become the country’s leading AI hub.
The plan, released at a high-quality economic development conference, marks the shift of the project from concept to full implementation.
Authorities aim to scale computing power services to 7.5 exaFLOPS this year and add more than four industry-leading vertical AI models, part of a broader push to expand the global influence of foundational model upgrades.
First proposed in July 2025, the “China Computing Valley” blueprint calls for computing capacity to exceed 15 exaFLOPS during the 15th Five-Year Plan period (2026-2030), with an initial milestone of breaking 7 exaFLOPS in 2026.
By 2035, officials expect the district’s AI industry revenue to surpass 100 billion yuan ($14.6 billion), forming the backbone of the envisioned hub.
The newly issued 2026 action plan outlines six priorities: advancing large models, strengthening computing infrastructure, improving data integration, enabling ecosystem development, fostering industry growth and expanding openness.
It targets breakthroughs in five key areas, including raising the international profile of next-generation foundational models.
Gongshu’s efforts follows Hangzhou’s February call to “strive to become the nation’s top city for AI innovation,” with the district formalizing its role during the annual local legislative meetings.
Existing infrastructure
Local officials are betting on existing infrastructure and companies to anchor the effort.
A cloud computing cluster built from the former Hangzhou Iron and Steel Group facilities now hosts nearly 100,000 servers across more than 10,000 square meters, becoming what is described as eastern China’s largest dual-cloud system, known as “Hanggang Cloud” and “Zhejiang Cloud.”
The district is also home to DeepSeek, which has emerged as a key driver of the global open-source AI ecosystem.
Also based in Gongshu, the Zhejiang University Institute of Holographic Intelligent Technology, a collaboration between the prestigious university and Gongshu District Government, has incubated 38 tech firms with annual output exceeding 300 million yuan, Chinese media reported.
In hardware, Zhejiang Semrise Technology (浙江晟霖益嘉科技有限公司) is pushing into a critical gap in semiconductor equipment, with its domestically developed 12-inch physical vapor deposition machines recently entering client production line validation.
Localization rates for such high-end equipment remain below 20% as of 2025, underscoring the technical barriers and supply chain constraints domestic firms are racing to overcome.
Gongshu officials have framed the transition from using computing power to manufacturing it as central to the strategy. About 21,000 mu (1,400 hectares) of industrial land in the northern part of the district has been reserved for computing equipment manufacturing, with projects including high-speed silicon photonics modules and a cloud innovation center moving ahead.
Zhejiang province’s core AI industry generated 680 billion yuan in revenue in 2025, up more than 20% year-on-year.
By focusing on building computing capacity rather than just consuming it, Gongshu is positioning itself to secure a strategic foothold in the Yangtze River Delta’s evolving AI infrastructure landscape.
