China's energy boom proves Elon Musk right about the AI gap

China is accelerating large-scale power capacity expansion, thereby strengthening its advantage in the global artificial intelligence (AI) race and increasing concerns from tech leaders like Elon Musk and Nvidia CEO Jensen Huang. New data shows that China’s power system construction speed far exceeds that of the U.S., enough to create a decisive gap in the next phase of AI development.

Elon Musk has stated that the biggest barrier to AI today is no longer chips but electricity, warning that the world may produce more AI chips than the power supply can support, with China being an exception. Jensen Huang also believes that energy is the lowest but most critical foundation in the AI competition chain.

In the U.S., grid overloads and lengthy procedures are hindering data center growth. In contrast, China continuously adds capacity from various sources, especially renewable energy. However, abundant energy alone does not guarantee AI leadership, as the U.S. still maintains an advantage in advanced chips and core AI models.