China Telecom invests US$1.7 billion in 40,000 servers, boosting Huawei's Kunpeng ecosystem

China Telecom has awarded a massive procurement contract for 40,000 high-performance servers, with a budget ceiling of 11.55 billion yuan (US$1.7 billion), covering the company's needs for 2026 and 2027. The contract is split into two packages: one for 28,000 servers linked to Huawei's Kunpeng ecosystem, and another for 12,000 C86 servers compatible with domestic x86 platforms. Although Huawei did not directly bid, the six winning companies—including ZTE, H3C, Inspur, and Lenovo—are all publicly associated with the Kunpeng ecosystem. This arrangement allows Huawei to capture government procurement market share without appearing on official supplier lists. The deal mirrors similar purchasing sprees by other state-owned carriers, reflecting Beijing's push for greater use of domestic hardware.