China Unicom has announced a significant shift in its business strategy by reducing its capital expenditures while increasing investment in artificial intelligence (AI) infrastructure. The company plans to cut its capital expenditure by nearly 8% in 2026, reducing it to around CNY 50 billion ($7.2 billion), down from CNY 54.2 billion in 2025. Despite this reduction, over 35% of the budget will be directed towards computing infrastructure due to a rising demand in the AI sector.
This decision coincides with a significant increase in AI-related revenue for China Unicom, which grew by 147% year-on-year. The revenue from computing power businesses now constitutes 15.4% of the company’s total service revenue. Additionally, the carrier is rapidly expanding its AI infrastructure with over 1.1 million data center cabinets, boosting its computing capacity to 45 EFLOPS.
On the financial front, the company continues to maintain steady operations. Service revenue was reported at CNY 347.7 billion, with a modest 1% net profit increase to CNY 20.8 billion. Its free cash flow also rose by 28.5% to RMB 36 billion. Furthermore, data center revenue showed an impressive 8.5% growth, reaching CNY 28.1 billion in 2025.
China Unicom’s subscriber base exceeded 1.2 billion by the end of 2025, comprising over 700 million IoT connections. It has advanced its 5G infrastructure in more than 330 cities in China and is also making strides in the realm of cloud technology, evidenced by a 5.2% revenue growth in cloud services.
Infrastructural upgrades continue with the expansion of gigabit broadband capabilities, the introduction of 10-gigabit broadband, and the trial of 10-gigabit optical fiber networks in over 100 cities. In cutting-edge sectors, China Unicom is venturing into 6G and quantum communications, having initiated quantum-secure leased lines.
China Unicom’s focus isn’t unique. During MWC 2026, China Telecom’s president, Liu Guiqing, highlighted the company’s efforts to pivot from traditional telecom services to technology-oriented operations fuelled by AI, cloud infrastructure, and computing power services. China Telecom has deployed AI in its internal processes like network management and software development, significantly enhancing its operational efficiency.
With the increasing prominence of AI, the telecom industry must evolve. Liu outlined strategic directions such as aligning 6G development with AI evolution, improving AI security, and enhancing global cooperation on AI technologies.
According to Lian Jye Su, chief analyst at Omdia, this shift by China Unicom demonstrates a larger trend among telcos to become AI infrastructure leaders in a rapidly digitalizing economy. He noted the increasing importance of cloud and AI services for Chinese telecoms, affirming their commitment to the national AI agenda.
Overall, China Unicom’s advancements and strategic shifts underline the ongoing transformation within the telecommunications sector, pivoting towards AI and computing infrastructure as key components for future growth.
