The state of AI: Energy is King, and the US is Falling Behind
The burgeoning age of Artificial Intelligence hinges on a critical, often overlooked resource: energy. This presents a significant challenge for the United States, where a wave of new data centers – the engines powering AI – are poised to come online, yet the nation appears unprepared to deliver the consistent power supply and infrastructure needed to support them.
For roughly a decade leading up to 2020, data centers successfully managed increasing energy demands through efficiency improvements. However, the recent surge in electricity consumption, driven by billions of daily queries to popular AI models, is outpacing those gains. This shortfall is already manifesting in rising electricity costs for communities near rapidly expanding data centre hubs.
To avoid a future where AI’s potential is stifled by exorbitant energy prices,the US must prioritize energy abundance and learn from global leaders – especially China.
The contrast is stark.in 2024 alone, China added 429 gigawatts (GW) of new power generation capacity, exceeding the net capacity added in the US by a factor of six. While China still relies on coal for a portion of it’s electricity, its focus is rapidly shifting towards renewable sources. The country is aggressively investing in solar, wind, nuclear, and gas power at unprecedented rates.
The US, conversely, is attempting to revitalize its struggling coal industry.This approach is problematic, as coal-fired power plants are not only environmentally damaging but also increasingly expensive to operate. Moreover, aging US coal plants are becoming less reliable, currently operating at just 42% of their potential capacity – a significant drop from 61% in 2014.
This situation poses a serious risk. Without a essential shift in energy policy, the US risks transitioning from an innovator to a consumer in both the energy and AI technology sectors. The economic implications are already visible: China currently generates more revenue from exporting renewable energy technologies than the US does from its oil and gas exports.
