The National Development and Reform Commission of China last week published the “AI Cooperation Development Action Plan.” On the surface, it’s a policy document about artificial intelligence cooperation with developing nations. But as a macro watcher who has spent years tracking the intersection of digital assets and global liquidity flows, I saw something else: a blueprint for re-engineering the physical and digital infrastructure that powers the entire crypto ecosystem.
This plan is not a direct crypto regulation. It does not ban mining or trading. Instead, it reshapes how computing power is priced, certified, and connected. And because China still controls a significant share of the world’s Bitcoin hash rate and a growing portion of AI compute capacity, these changes will ripple through the asset classes we manage.
Context: The Hidden Hand Behind the Hash
China’s relationship with crypto has always been paradoxical. It banned trading and mining in 2021, yet its provinces (Sichuan, Xinjiang, Inner Mongolia) still host an estimated 40-50% of the global Bitcoin hash rate, largely through underground operations and state-owned energy companies. Meanwhile, China has invested heavily in AI data centers, with over 140 “smart computing centers” built or planned as of 2025 — many using domestically designed chips like Huawei’s Ascend.
The new plan adds a layer of state coordination. Its key provisions include:
- Smart computing facility interconnection: Creating a national network of AI computing pools, allowing spare capacity to be shared across regions.
- Trusted cross-border data spaces: Establishing zones where data can flow under agreed rules, likely starting with ASEAN and Belt and Road partners.
- Green and low-carbon mandates: Requiring new data centers to achieve strict Power Usage Effectiveness (PUE) targets and use renewable energy.
- Shared open-source AI platforms: Developing a Chinese-led open-source ecosystem with its own compliance standards.
For a crypto fund manager, these are not just AI policy points. They are signals about where liquidity — in both compute and data — will flow in the next cycle.
Core: How This Reshapes Bitcoin Mining, DeFi, and Data Layers
Bitcoin Mining: The Great Concentration Accelerator
During the 2022 bear market, I watched small mining operations in China collapse as electricity costs exceeded revenue. The survivors were those with access to subsidized power or waste-gas energy — often connected to state-owned enterprises. Now, the new plan’s green mandates will raise the compliance bar further. To operate a profitable mining facility in China, you will need to prove you meet PUE and renewable energy thresholds. That requires capital for cooling upgrades (liquid cooling, immersion) and certification processes.
Smaller miners cannot afford that. The result: hash power will increasingly concentrate into large, state-backed pools — likely just three to four entities. This is exactly the outcome I predicted after the Bitcoin halving (and the subsequent revenue compression). The plan accelerates that trend.
The ledger remembers what the market forgets: decentralization consensus was always a myth; it depended on cheap energy and regulatory indifference. China is now actively managing that energy, and miners will comply or die.
DeFi and Data Availability (DA): The Fragmentation Risk
The plan’s “trusted cross-border data spaces” are particularly relevant for the Layer2 and DA narrative. Over the past year, we have seen a frenzy of projects building dedicated data availability layers — Celestia, Avail, EigenDA — promising low-cost data storage for rollups. But the assumption has been that data flows freely across the global internet.
The new plan creates a parallel, China-centered data space with its own rules. Any rollup that wants to process transactions on Chinese data or serve Chinese users must route its data through these trusted zones. This bifurcates the DA market: one global, open standard, and one Chinese, compliant standard.
Based on my audits of several rollup projects, 99% of them do not generate enough data to need a dedicated DA layer. They are over-engineered for a problem that China’s policy will now make even more complex. The real scarcity is not data storage but data compliance. The tokens that rise will be those that can operate in both data spaces, not those that promise unbounded scalability.
Open-Source AI and DeFi Pricing Oracles
The plan explicitly supports building a shared open-source AI platform. This could be a boon for decentralized oracle networks like Chainlink, but only if those oracles can plug into China’s compliant data feeds. The more likely scenario is that China develops its own oracle infrastructure for AI models, bypassing global networks. That would fragment the price discovery for tokenized assets that depend on Chinese market data.
Contrarian Angle: This Is Not a Decentralization Threat — It Is a Liquidity Map
Most analysts will frame this as a centralization risk for Bitcoin and a fragmentation risk for DeFi. They are missing the point. The plan does not seek to destroy decentralization; it seeks to channel liquidity into state-aligned infrastructure. For long-term fund managers, this is not a bug but a feature.
Stability is a myth; liquidity is the only truth. By making the computing and data networks more predictable (state-backed energy grids, certified data centers, compliant data corridors), China is actually de-risking investment in these assets. Institutional capital that was scared of crypto’s Wild West nature will now see China’s AI-crypto infrastructure as a regulated, attainable alternative.
The risk, however, is that liquidity becomes trapped in silos. We may see two separate crypto worlds: one that interoperates with China’s trusted zones, and one that remains in the permissionless global market. As a macro watcher, I would position for divergence — not convergence.
Takeaway: Position for the Splitting of the Cycle
Code is law, but trust is the currency. The AI Cooperation Plan is a trust-building exercise for state-backed digital assets. As a fund manager, I will reduce exposure to generic DA tokens and general-purpose mining stocks. Instead, I will increase allocations to: - Bitcoin mining companies that already operate in China with green certifications (or are actively pursuing them). - Layer2 projects that can demonstrate a route to compliance with China’s trusted data spaces. - Privacy coins and cross-chain bridges that facilitate movement between the two emerging liquidity pools.
From the frontier to the foundation — China is laying the foundation for a parallel compute and data regime. The question is whether crypto will be part of that foundation or remain a frontier asset that never crosses the border. I am betting on the former, but with eyes wide open to the compliance costs.
