Limitless Electricity Gives China AI Advantage
China and the U.S. are in a race for AI supremacy. Recently, OpenAI CEO Sam Altman said there was no reason to think the U.S is ahead. Nvidia CEO Jensen Huang has made the same statement. The next stage of the AI competition will be electricity wars. China has a huge and vast advantage.
China does not have these problems. First, there is no voting and lobbying. The central government can constrain electricity supply and strategically manage generation. However, it does not need to. China has a limitless supply of electricity for its current needs and almost any need forecast for the future.
China and the U.S. are in a race for AI supremacy. Recently, OpenAI CEO Sam Altman said there was no reason to think the U.S is ahead. Nvidia CEO Jensen Huang has made the same statement. The next stage of the AI competition will be electricity wars. China has a huge and vast advantage.
China Overcapacity
Fortune recently reported, “The country’s reserve margin has never dipped below 80%–100% nationwide, meaning it has consistently maintained at least twice the capacity it needs.” Its grid and supply means expansion of data centers does not create a problem.
Even if China’s AI development is behind the U.S. benchmark, AI products are only as good as the extent to which they can be deployed. It is estimated that major tech companies will spend $350 billion on AI server farms this year. Private equity and private credit companies will put in more. However, unless there is a remarkably sharp rise in nuclear, solar, and wind energy, they will have less and less chance to buy energy. China does not have that problem.
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