China's dominance in electricity generation surpasses the US, alarming AI specialists, with inadequate supplies and infrastructure potentially jeopardizing the US's AI ambitions over the long term.

China and the United States are both heavily investing in artificial intelligence (AI) and building massive AI data centers. However, a significant difference lies in the power supply for these centers, with China appearing to hold an advantage.

Many Chinese data centers are either idle or underutilized, a stark contrast to the U.S., where the insatiable demand for power is straining the electricity supply. This power constraint may limit the growth of AI in the U.S., even with more powerful and efficient hardware.

China, on the other hand, has an 80% to 100% power reserve, a testament to its extensive investments in renewable energy projects. The country adds more electricity demand than Germany's annual consumption every year, yet it manages to maintain a secure and inexpensive electricity supply, thanks to massive investments in advanced hydropower and nuclear technologies.

Beijing plans its energy production well in advance, with most of its power plants being state-owned. Chinese companies like Huawei Digital Power are leading the way in renewable energy production, implementing large-scale solar and energy storage projects. China's investments in wind, solar, and energy storage technologies are massive, with numerous state-owned and private enterprises expanding capacity by hundreds of gigawatts through 2025 and beyond.

In contrast, the U.S. faces major hurdles with its electricity supply for AI infrastructure. Tech giants like Microsoft, Google, Amazon, Oracle, Nvidia, and more are investing in the research and development of nuclear reactors, but new power plants are not being built fast enough to satisfy AI's demand. This has led to disruptions in the electricity grid and supply, causing a lack of supply and price increases for every user.

Elon Musk is one of the few attempting to address this issue by importing a power plant to power his data centers in the U.S. However, China's advantage in power supply could give it an edge in the AI race. For instance, Huawei's CloudMatrix cluster has better performance than Nvidia's GB200, a clear demonstration of China's potential to gain the upper hand through sheer brute force of power.

Beijing is also developing a network to create a marketplace for selling surplus data center capacity. If the U.S. does not address its electricity supply issue, it risks lagging behind China in AI development. China can reactivate coal plants to cover any power shortfall if demand outstrips supply, further strengthening its position.

The race for AI dominance is far from over, but China's advantage in power supply is a significant factor that could tip the scales in its favour. It remains to be seen how the U.S. will respond to this challenge and whether it can catch up in the race for AI supremacy.

China's dominance in electricity generation surpasses the US, alarming AI specialists, with inadequate supplies and infrastructure potentially jeopardizing the US's AI ambitions over the long term.