Kazakhstan's AI pitch rests on cheap coal power and a US export licence

Kazakhstan used this week's AI & Digital Bridge forum in Astana to make its most explicit offer yet to the world's largest computing companies. President Kassym-Jomart Tokayev promised light-touch regulation, saying the country "must not regulate this sphere to such an extent that promising teams, developments and capital begin to leave for other jurisdictions". He met Nvidia, General Atlantic and the UAE's G42 on the forum's first day. Deputy Prime Minister Zhaslan Madiyev announced work on a "data embassy" regime. The head of Kazakhtelecom spoke of power at around 2.5 US cents per kilowatt-hour and more than 5 GW of new capacity. The ambition is plausible in parts. It is also built on two foundations that Kazakhstan does not fully control: an ageing coal-fired power system and US export approval for advanced chips.

What was offered

The centrepiece is Data Center Valley in Ekibastuz, in the Pavlodar region. According to the Astana Times, the project starts at nearly 300 MW and can be expanded to 1 GW. In June the government signed agreements worth up to $10bn with the US firm Firebird and with Nvidia. The Times of Central Asia reports plans for a cluster of about 100,000 advanced GPUs and a first facility of 50 MW due to open in June 2027. Madiyev said construction had begun and that the facility should open in the third quarter of next year. On 1 October Nvidia's vice president Rev Lebaredian outlined plans to join the project's next phase, General Atlantic expressed interest, and Tokayev discussed G42's possible participation with a UAE delegation.

Madiyev's "data embassy" proposal would let hyperscalers operate in Kazakhstan under a separate international legal framework, with fast access to land and energy at competitive prices. Bagdat Mussin, chairman of Kazakhtelecom, said the country could begin exporting computing power from 2027. He added that Kazakhtelecom had already cut network latency from 90 to 70 milliseconds and that a new fibre link across the Caspian could bring it down to 45–50. Tokayev noted that IT services exports exceeded $1bn last year. Two Kazakh supercomputers using Nvidia H200 chips appeared in the June 2026 TOP500 list, at 104th and 122nd. A separate $2bn sovereign AI hub, to be run by Freedom Holding on Nvidia technology, has a site with 100 MW of available power. Madiyev described the strategy as building all five layers of an AI economy, from energy and chips to cloud access, language models and applications.

The power question

The core of the offer is cheap electricity, and here the numbers deserve a closer look. Mussin said that the country should start with the resources it already has, "including coal". Coal provides about 62 per cent of Kazakhstan's electricity, and the average level of wear on power-sector equipment is put at around 56 per cent, according to figures published in August. The government's stated aim is to cover domestic demand fully and reach a capacity surplus from 2027. It plans more than 26 GW of new capacity by 2035, of which 13.3 GW by 2029.

Scale matters. Kazakhstan expects to generate about 126.5bn kWh this year. A 1 GW campus running continuously would use about 8.8bn kWh a year, roughly 7 per cent of that total. The first 300 MW is manageable. The full 1 GW would be equivalent to a large share of the new capacity the country is adding: about 2.6 GW is due to be commissioned in 2026. In September the Energy Ministry moved to raise ceiling tariffs for 60 generators to pay for repairs and equipment renewal. A price of 2.5 cents for data centres is therefore a policy choice. Someone, whether households, industry or the budget, will bear the cost of building the plants that make it possible.

There is also a climate cost. Computing powered by Kazakh coal plants would carry a heavier emissions footprint than computing powered by most alternative sources. Mussin's remarks suggest Astana is betting that price and speed matter more to buyers than the source of the power. Some buyers may agree. Others will not.

Chips, finance and two capitals

Madiyev was frank that "sovereign" AI does not mean self-sufficiency. Kazakhstan does not produce chips, he said, so it needs partners in both the West and the East and good relations with the agencies that run export controls. That is the second dependency. Firebird says its 125 MW allocation at Data Center Valley has export authorisation from the US Commerce Department's Bureau of Industry and Security. Further tranches of Nvidia hardware are likely to need the same approval.

Financing points in another direction. In September Kazakhtelecom's chairman said the company was in talks with financial institutions in the US and China to borrow several billion dollars for the valley, alongside bonds on the Astana International Financial Centre and loans from the Development Bank of Kazakhstan. Pravda.ru, reporting his comments, added that the final cost could reach several tens of billions of dollars. Combining Chinese money with US-licensed chips is not prohibited, but it is the sort of arrangement that export-control officials examine closely. Kazakhstan's "data embassy" idea, giving foreign operators a separate legal framework, may be partly intended to reassure them.

What would make the plan credible

• A published power supply arrangement for the campus showing which plants serve it, at what tariff, and who funds the new capacity.
• Clarity on whether the 50 MW first phase opens in June or in the third quarter of 2027, since officials are giving different dates.
• The legal text of the data embassy regime, and how it handles Kazakh law enforcement access and US end-use conditions.
• The source of the debt: the mix of US, Chinese and domestic lenders will matter for future export licences.

Kazakhstan's strengths are real: land, energy resources, a fast-moving state and experience running Nvidia systems. Whether it becomes a regional computing hub will depend less on announcements at forums than on two quieter questions: whether its power system can supply a gigawatt without strain at home, and whether Washington keeps licensing the chips while Beijing helps pay for the buildings.

Sources

• The Astana Times — Tokayev Calls for Responsible AI Development, Stronger Technology Cooperation at AI & Digital Bridge 2026
• The Astana Times — Tokayev Discusses Major AI and Data Center Projects with Global Technology Leaders
• Trend — Kazakhstan plans data embassy regime to attract global tech giants
• Trend — Kazakhstan targets computing power exports starting in 2027
• Qazinform — Kazakhstan aims to build 5 GW capacity for regional AI computing hub
• The Times of Central Asia — NVIDIA CEO Jensen Huang Set for First Visit to Kazakhstan in October
• Engineering.com — Firebird launches regional NVIDIA DSX AI factory
• Pravda.ru — «Казахтелеком» ведет переговоры с финансовыми институтами США и Китая по проекту ЦОД
• MENAFN — 26 GW Of New Generation Capacity - Kazakhstan's Energy Target For 2035
• Trend — Kazakhstan plans to adjust ceiling electricity tariffs for 60 power producers