Power Grid Crisis Threatens U.S. AI Dominance as China Builds Energy Infrastructure Advantage

Donald Trump Warns China Will Easily 'Catch Us' In AI Race If Washington Doesn't Stop State-By-State Regulation: 'We Must Have...' - NVIDIA (NASDAQ:NVDA)

On Tuesday, President Donald Trump warned that China could "easily catch" the U.S. in the global artificial intelligence race unless the country adopts a unified federal approach to AI regulation. Trump Calls For Single Federal AI Standard In a post on Truth Social, Trump argued that the U.S. risks losing its competitive edge because states are crafting their own rules for artificial intelligence. He said investment in AI is helping make the U.S. economy the "hottest in the world," but warned that "overregulation by the states" threatens that momentum. Trump criticized efforts by some states to incorporate diversity and inclusion requirements into AI systems, stating it could lead to what he described as "woke AI." He urged Congress to mandate one national regulatory framework, saying a fragmented system gives China room to outpace the U.S. "If we don't," he said, "China will easily catch us in the AI race." See Also: Palantir Could Be Nvidia's Fastest Route To $500 Billion In AI Software -- Cathie Wood Saw It Coming Experts Warn Power Grid, Not Chips, Is The Bigger Risk Trump's warning follows growing concerns from industry figures. Investor Kevin O'Leary said China is "crushing" the U.S. in electricity capacity, arguing that America's grid is already tapped out while China can add new coal plants without delays. Nvidia Corp (NASDAQ:NVDA) CEO Jensen Huang has issued similar cautions, noting that China's cheaper power and faster approvals give it a structural advantage. Benzinga's Edge Stock Rankings show Nvidia posting strong Momentum, Growth and Quality scores, with a steady upward trend across short, medium and long-term periods. Click here to see how it stacks up against competitors. Read Next: After Google's $2.7B Acquisition Of Founders And Staff, This AI Startup Abandons Large Language Model Plans And Shifts Focus Away From Chatbots Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock NVDANVIDIA Corp$182.050.38%OverviewMarket News and Data brought to you by Benzinga APIs

Jensen Huang's Stark Warning : China Could Seize the AI Lead Faster Than Expected

What if the future of global power wasn't decided by military strength or economic might, but by who leads in artificial intelligence? NVIDIA CEO Jensen Huang has sent shockwaves through the tech world with his bold assertion: China is on track to win the AI race. While the United States has long been seen as the epicenter of innovation, Huang's claim underscores a seismic shift in the balance of technological power. With China's AI ecosystem advancing at an unprecedented pace and U.S. policies potentially backfiring, the stakes couldn't be higher. Could this be the moment the world witnesses a new leader in global AI dominance? In this overview, AI Grid explains more about the factors fueling China's meteoric rise in AI, from its massive concentration of researchers to its strategic investments in infrastructure. We'll also examine the challenges facing the U.S., including energy constraints and the unintended consequences of export restrictions. Beyond the technology itself, this race has profound implications for geopolitics, ethics, and the future of global governance. As the competition intensifies, the question isn't just who will lead in AI, it's how this leadership will reshape the world as we know it. China has emerged as a formidable force in AI development, with approximately 50% of the world's AI researchers based within its borders. This concentration of expertise has driven remarkable progress in areas such as open source AI models, autonomous systems, and AI-powered healthcare solutions. These advancements are not only enhancing technological capabilities but also contributing to economic growth and operational efficiency across various sectors. For example, the Kimmy K2 AI model, developed in China, has demonstrated innovative capabilities, showcasing the nation's ability to compete with leading U.S. AI research institutions. This progress is further supported by China's strategic investments in infrastructure, including advanced data centers and energy systems tailored to meet the computational demands of AI technologies. These efforts reflect a deliberate and coordinated approach to securing a leadership position in the global AI landscape. While the United States remains a leader in AI innovation, it faces significant challenges that could undermine its long-term competitive edge. One pressing issue is the strain on the nation's energy infrastructure, which is critical for supporting the massive computational requirements of AI data centers. Without scalable and sustainable energy solutions, the U.S. risks falling behind in the expansion of its AI capabilities. Moreover, U.S. export restrictions on advanced AI chips, intended to limit China's progress, may have unintended consequences. Jensen Huang has warned that these policies could incentivize Chinese developers to build independent ecosystems, potentially rivaling U.S. dominance. Such isolation could also reduce America's influence over global AI standards and innovation, creating a fragmented technological landscape. Uncover more insights about Artificial Intelligence (AI) in previous articles we have written. The competition between the U.S. and China in AI extends beyond technology, influencing global geopolitics. Experts, including former Google CEO Eric Schmidt, have cautioned that if China takes the lead in AI, it could reshape international norms and governance structures. A central concern is the divergence in values between the two nations, particularly regarding AI's role in surveillance and individual freedoms. China has embraced AI-driven surveillance technologies, raising ethical questions about privacy and state control. These systems are being integrated into public security frameworks, allowing extensive monitoring of citizens. In contrast, the U.S. faces the challenge of balancing innovation with ethical considerations, such as data privacy and freedom of expression. These differing approaches highlight the broader implications of AI leadership on global society and governance. The U.S. and China are pursuing distinct strategies in their quest for AI supremacy. The United States is heavily focused on achieving artificial general intelligence (AGI), which aims to create machines capable of human-like reasoning and decision-making. While this ambitious goal holds the promise of innovative breakthroughs, it also involves significant risks and long-term investments. China, on the other hand, is prioritizing practical and immediate applications of AI. By integrating AI into industries such as manufacturing, logistics, and healthcare, China is achieving measurable economic benefits while building a robust foundation for future advancements. This pragmatic approach allows China to maintain momentum in the AI race while addressing pressing societal needs, positioning itself as a leader in applied AI technologies. The ethical dimensions of AI development are central to the global debate over leadership in this field. As AI technologies become increasingly pervasive, questions about governance, accountability, and societal impact take on greater significance. The U.S. and China offer contrasting models of AI governance: the U.S. emphasizes transparency, individual rights, and ethical standards, while China focuses on state-driven objectives and centralized control. Jensen Huang has advocated for a global AI ecosystem that uses American technology to promote ethical standards and foster innovation. However, achieving this vision requires a careful balance between national security concerns and the need for international collaboration in AI research. The challenge lies in creating a framework that encourages cooperation while safeguarding critical technologies and values. The race for AI dominance is not merely a technological competition, it is a contest that will define the future of global power dynamics. Both the United States and China are vying for supremacy, and the stakes are extraordinarily high. For the U.S., addressing internal challenges such as energy infrastructure and fostering innovation through strategic policies will be essential to maintaining its leadership. Meanwhile, China's rapid advancements and pragmatic approach signal a shift in the global AI landscape, emphasizing the urgency of strategic collaboration and ethical governance. As this competition unfolds, the implications extend far beyond technology. The outcome of the AI race will influence economic systems, societal structures, and geopolitical alliances for decades to come. The decisions made today by both nations will shape not only their own futures but also the trajectory of global progress in artificial intelligence.

After Nvidia CEO Jensen Huang, Kevin O'Leary Says China Threatens US AI Leadership Because Of This One Thing -- And It's Not Chips - Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN)

On Friday, investor Kevin O'Leary issued a stark warning that China's sweeping power capacity -- not chips -- now poses the biggest threat to the U.S.'s position in the global AI race. O'Leary Says China's Energy Build-Out Gives It AI Edge While sharing a clip of his Fox News appearance on X, formerly Twitter, O'Leary said the U.S. is at risk of falling behind China in AI because of one critical factor: electricity. In the video, he said China's speed in building power infrastructure has given it a decisive advantage as AI development accelerates worldwide. "The Chinese are kicking our a** right now. In AI, they are." "I'm neck-deep in building data centers right now, and let me tell you something uncomfortable: China is crushing us in power generation for AI," O'Leary said on X, adding, "Not chips. Power." He argued that China can rapidly add new coal plants without facing regulatory hurdles, while U.S. projects often stall for years. "When the Supreme Leader wants more capacity, he builds a coal plant. Simple. No 5-year regulatory nightmare," he said. He added that America's grid is "tapped out" and slowing AI growth. See Also: Nvidia CEO Jensen Huang Hails TSMC Wafer Backing Amid 'Very Strong' Demand For Blackwell Chips After Trump Bars Sales To 'Other People' Big Tech Splits With Nvidia As Washington Considers New Export Limits O'Leary's warning comes as U.S. lawmakers advance the Gain AI Act, which would tighten restrictions on exporting advanced AI chips to China and other nations under arms embargoes. Microsoft Corp (NASDAQ:MSFT) has endorsed the bill, while Amazon.com, Inc.'s (NASDAQ:AMZN) cloud unit has reportedly privately signaled support to Senate staffers. Their position marks a rare public break with Nvidia Corp (NASDAQ:NVDA), the dominant supplier of AI processors powering both companies' cloud infrastructure. Nvidia countered the proposal in a statement to Benzinga, calling it a "self-defeating policy" rooted in science fiction. The company said it already avoids selling restricted products to adversaries and warned that limiting global access could undermine President Donald Trump's AI Action Plan. Nvidia's China Market Has Collapsed, CEO Warns Nvidia CEO Jensen Huang has repeatedly cautioned that China's AI capabilities could catch up due to cheaper power and fewer regulatory barriers. He said earlier this month that China could win the AI race, citing its low-cost, heavily subsidized power and fast-moving regulatory system. He said earlier this year that Nvidia's market share in China fell from roughly 95% to almost nothing after U.S. export rules tightened and Beijing barred foreign AI chips from state-funded data centers. Benzinga's Edge Stock Rankings place the company in the 98th percentile for Growth and 93rd for Quality, highlighting its strong performance relative to industry peers. Read More: Tesla Investor Ross Gerber Says 'Super Sad' To See Federal EV Subsidies End: 'Credits Created...' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock AMZNAmazon.com Inc$235.520.35%OverviewMSFTMicrosoft Corp$510.430.05%NVDANVIDIA Corp$191.060.47%Market News and Data brought to you by Benzinga APIs

America Could Lose AI Race Against China Due To Power Crunch, Goldman Says - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)

The future of artificial intelligence may depend less on chips from Nvidia Corp. (NASDAQ:NVDA) and Advanced Micro Devices Inc. (NASDAQ:AMD), and more on the raw watts needed to power data centers. America's lead in the global artificial intelligence race is dangerously walking a tightrope, as a looming domestic power shortage threatens to stall progress and open the door for China to seize the upper hand, according to Goldman Sachs. The bank's analyst Hongcen Wei indicated the key ingredient to dominating the global AI race is having reliable and ample power supply -- something the United States may struggle to maintain. "The global AI race is heating up, with fierce competition centered on chips, rare earths access, energy supply, talent, and AI adoption," said Wei in a Thursday report. But what could soon matter most, he said, is electricity. "As AI demands massive power, reliable and ample power supply is likely to be a key factor shaping this race, especially because power infrastructure bottlenecks can be slow to solve." US Data Center Growth May Hit A Wall Currently, the U.S. leads the world in AI infrastructure, hosting 44% of global data center capacity, equivalent to over 50 gigawatts (GW). That's roughly equal to the combined capacity of China, the EU, Japan, South Korea and India. Data centers already account for 6% of total U.S. electricity demand, and Goldman projects this to rise to 11% by 2030. But that growing demand is colliding with a strained power grid. Effective spare power capacity -- a key measure of energy system flexibility -- has dropped from 26% five years ago to 19% today, nearing the 15% threshold commonly viewed as critically tight. Eight of 13 U.S. regional power markets have already hit or fallen below that level. Goldman projects that, even under conservative assumptions, spare capacity in most U.S. regional markets will drop below 15% by 2030, tightening constraints on future data center development. In a scenario where AI infrastructure grows faster -- as Goldman's equity analysts expect -- spare capacity would dip even further below critical levels. This power bottleneck is already impacting costs. Real-time electricity prices surged last summer, and capacity prices in PJM -- the regional grid that includes Virginia, the global data center capital -- jumped sharply. China Could Pull Ahead With 400 GW In Spare Capacity While the U.S. grapples with shortages, China is gearing up to meet future AI demands head-on. "China -- the world's second-largest data center hub -- already has major power spare capacity and is planning to boost power supply, across renewable, coal, natural gas, and nuclear sources," Wei said. By 2030, Goldman projects, "China to have effective power spare capacity equivalent to over three times the world's expected data center power demand (~400 GW vs. ~120 GW), positioning it to fuel rapid data center expansion." China's planned spare capacity would reach 25% of its peak summer demand by 2030. Given that China's power market is already twice the size of the U.S., this provides Beijing with far greater flexibility to fuel AI-related infrastructure, alongside other energy-intensive industries like aluminum production. Why The US Is Falling Behind Goldman says the U.S. grid is tightening due to three issues: strong demand growth from data centers, insufficient renewable and natural gas capacity to replace retiring coal, and limited deployment of storage and emerging technologies. These challenges are worsened by long lead times and permitting backlogs for natural gas turbines. Goldman sees little additional nuclear or gas capacity coming online before 2030, citing construction and supply chain constraints. AI's Future May Be Powered By Watts, Not Just Chips While U.S. policy could boost renewables or delay coal retirements, the bank says those measures are "unlikely to reverse the tightening trend in the next few years." The AI race is now about more than chips and talent -- it's about energy. As Goldman put it, "A key ingredient to win the global AI race is having reliable and ample power supply to feed data centers." And right now, that's what China is building -- and what the U.S. may soon lack. Image created using artificial intelligence via Midjourney. AMDAdvanced Micro Devices Inc $254.50-1.70% Overview NVDANVIDIA Corp $191.91-0.97% Market News and Data brought to you by Benzinga APIs