Taiwan has officially committed over NT$100 billion, or roughly US$3.2 billion, to a sweeping national program designed to transform the island into a global center for artificial intelligence. The plan, reported by Nikkei Asia on Tuesday, November 18, outlines a ten-point strategy centered on next-generation hardware, with government officials identifying silicon photonics, quantum computing, and AI robotics as core areas for accelerated research and development.

The initiative is modeled after Taiwan's landmark "10 Major Construction Projects" of the 1970s, which helped modernize the island's infrastructure and manufacturing landscape. This time, the government aims to make AI the new industrial backbone—expected to generate NT$7 trillion in additional economic value by 2028 and NT$15 trillion by 2040. Taiwan's draft 2026 budget already earmarks more than NT$30 billion for the program's initial rollout.

President Lai Ching-te and Premier Cho Jung-tai have repeatedly stated their ambition to place Taiwan among the world's top five countries in computing power. A centerpiece of that effort is a new state-backed National AI Data Center planned for Tainan, supplemented by a fast-growing set of private AI compute deployments across the island.

Foxconn and Nvidia are jointly building a large-scale AI data center in Kaohsiung based on Nvidia's Blackwell platform, with capacity expected to reach 100 megawatts at full deployment. GMI Cloud, another major industry participant, recently announced plans to install 7,000 Blackwell GPUs in Taiwan as part of a 16-megawatt cluster optimized for dense inference workloads.

Power Shortages Threaten Expansion of AI Compute Infrastructure

Yet Taiwan's AI ambitions may collide with its energy realities. The island shut down its last operating nuclear power plant in May, removing a major source of stable baseload electricity. Meanwhile, renewable energy output—especially offshore wind—continues to fall short of government targets. Southern Taiwan, where many of the new AI data centers are concentrated, also faces slower-than-expected transmission grid expansion.

Industry observers warn that without significant power-infrastructure upgrades, Taiwan may struggle to energize and cool the dense, power-hungry racks required by modern AI clusters.

To mitigate these challenges, operators are exploring higher-efficiency architectures. Nvidia has been promoting its 800-volt DC busbar system for data-center power delivery, and the upcoming Foxconn–Nvidia facility in Kaohsiung is expected to serve as a showcase for the design, potentially accelerating its adoption among Taiwanese data-center operators.

Energy, Cooling, and Grid Capacity to Determine Pace of AI Growth

Even with strong political support and accelerating private investment, Taiwan's path to becoming an "AI island" hinges on whether its energy grid can keep pace with the projected surge in compute demand. The scale of planned deployments—including multi-megawatt Blackwell clusters and high-density AI racks—will place unprecedented pressure on Taiwan's power and cooling systems, far beyond the already heavy requirements of its semiconductor fabs.

For now, Taiwan has laid out one of the most ambitious national AI ambitions in Asia. But realizing those goals will depend on whether the island can rapidly expand its power capacity to support the next wave of AI hardware.