Taiwan Wants to Become an “AI Island” 

Taiwan is planning a huge bet on artificial intelligence: more than NT$100 billion (about US$3.2 billion) to turn the country into a global “AI island” by 2040.

The government’s goal is ambitious:

• Build national AI data centers
• Create research hubs for silicon photonics and quantum computing
• Set up AI robotics labs and grow a new generation of high-tech industries

Officials want Taiwan to rank among the top five countries in the world for computing power and generate up to NT$15 trillion in AI-driven economic value by 2040. The 2026 budget alone will dedicate over NT$30 billion to kick-starting these projects.

Big Plans: Data Centers, Chips, And Research Hubs

Key parts of the plan include:

• National AI data center in Tainan, funded by the government
• Private mega-data centers in cities like Kaohsiung
• A 100 MW AI center from Foxconn and Nvidia in Kaohsiung, powered by Nvidia’s Blackwell GPUs
• New research hubs focused on:
  • Silicon photonics (faster, more efficient data transfer using light)
  • Quantum computing
  • AI robotics and automation

Together, these projects aim to create 500,000 jobs and build three “world-class” research institutes by 2040.

The Energy Problem

There’s a catch: all this AI power needs massive amounts of electricity.

• Taiwan’s last nuclear power plant has shut down, cutting a big source of stable, low-carbon energy.
• Offshore wind and other renewables have not grown as fast as planned.
• The power grid in southern Taiwan, where many new data centers are being built, is already under pressure.

To cope, future data centers in Taiwan will need to be much more efficient, using technologies like:

• High-efficiency power delivery systems (for example, 800 V DC busbars, promoted by Nvidia)
• Dense, energy-optimized GPU deployments like GMI Cloud’s 7,000 Blackwell GPUs in a 16 MW setup designed for AI inference.

But even with better efficiency, the question remains: can the grid keep up with AI demand?

Geopolitics: The Other Big Risk

On top of the energy challenge, Taiwan has to navigate:

• Rising U.S.–China tensions, which affect chip exports, tech partnerships, and investment flows
• Its existing role as the world’s leading chipmaker (through TSMC), which already makes it a strategic flashpoint

Building an “AI island” makes Taiwan even more important, but also more exposed to geopolitical risks.

It It succeeds

If Taiwan succeeds, it could:

• Stay at the center of the global semiconductor and AI ecosystem
• Attract more high-value R&D, startups, and cloud players
• Push forward new technologies in photonic chips, quantum hardware, and robotics

But the plan will only work if three things align:

1. Enough power to run massive AI data centers
2. Efficient infrastructure to keep energy and cooling costs under control
3. A stable geopolitical environment that allows long-term investment