A.I. demand won’t depend on ‘chips,’ it’ll depend on electricity
I hope you have a secure source of income and can afford to pay your rising utilities bills.
But even if you personally feel secure, your welfare depends on living in a functioning, prosperous society. And the nation’s well-being requires access to affordable, reliable energy.
We will not be able to bring back our industry and good jobs without it. And demands for electricity are exploding with the mammoth growth in data centers.
We are in a race with China to be number one in AI (artificial intelligence).
The graph compares growth of electricity generating capacity in the U.S. and China.
While the U.S. still has three times the generating capacity per capita, China’s has been growing at breakneck speed. They added more power generation between 2010-2024 than the rest of the world combined. China now has 30 nuclear reactors under construction, while the U.S. has none. In 2024, China hit a 10-year high of new coal plant construction.
China’s data centers pay 3¢ per kilowatt-hour. Virginia’s—America’s AI heartland—pay 9¢.
“AI doesn’t run on chips. AI runs on electricity. The chip is the brain. The grid is the blood supply.”
One analyst predicts: “By July 2026, the first major US tech company will announce an AI facility in a foreign country citing ‘power constraints’ as the primary driver.”
Unreliable, weather-dependent wind and solar generation cannot possibly power data centers. Merely replacing current nuclear and hydrocarbon generation, with adequate battery back-up, would cost an estimated $9 trillion, even if achievable. Recommissioning shut-down nuclear plants, such as Three Mile Island, small modular reactors (SMRs), and on-site natural gas plants are being explored.
Online, self-described author and independent analyst Shanaka Anslem Perera explained, “Everyone is watching the chip war. Nobody is watching the power war. That’s the trap. China’s power grid: 3.9 terawatts America’s power grid: 1.3 terawatts. Read that again. China has 3x the electrical capacity of the United States.”:
The report added, “You can design the most advanced GPU on Earth. If you can’t power a million of them cheaply, you lose. Goldman Sachs projects China will have 400 gigawatts of spare capacity by 2030. That’s triple the entire projected global AI power demand.”