Electricity: The Hidden AI Battleground

Electrical power is identified as the fundamental limit for AI deployment, with China's significant expansion in electricity generation giving it a major advantage over the US in the AI race. Elon Musk stated that China's tremendous electricity growth will be a key factor, potentially allowing it to produce more AI chips than it can power.

This perspective is echoed by Nvidia CEO Jensen Huang, who ranks energy as the lowest and most crucial layer of AI competitiveness. China's energy installations since 2021 have surpassed US historical figures, with projections indicating it will add substantially more generation capacity than the US in the coming years. This influx will better accommodate the rising power demands of data centers.

In contrast, the US faces challenges in scaling its power grid to meet surging demand, largely driven by data centers. Regulatory hurdles and supply chain issues slow new capacity additions, while China's grid connection for new data centers is reportedly seamless. This situation could lead to electricity shortfalls in some US markets by 2030.