China is preparing a massive state-backed investment of about 2 trillion yuan ($295.43 billion) to expand its artificial intelligence infrastructure nationwide, in a move aimed at strengthening its position in the global AI race against the United States.

The proposed five-year plan involves building a network of interconnected data centers across the country, according to people familiar with the matter.

The blueprint is being drafted by the National Development and Reform Commission alongside other key government agencies, and is expected to serve as the backbone of China’s long-term AI and advanced computing strategy.

At the center of the initiative is a push to accelerate adoption of artificial intelligence across major sectors of the Chinese economy while also advancing capabilities in emerging technologies such as quantum computing and humanoid robotics.

State-owned telecommunications giants, including China Mobile and China Telecom, are expected to operate most of the planned facilities and ensure that the infrastructure is tightly interconnected nationwide. The system is designed to create a unified computing network that supports large-scale AI development and deployment.

The investment comes as American technology companies are projected to spend more than $700 billion this year alone on artificial intelligence infrastructure, underscoring the escalating scale of global spending in the AI sector.