International

Energy strategy emerges as key battleground in US-China AI rivalry

Sunday, 27 April 2025 4:47AM UTC

The escalating competition between the United States and China to dominate artificial intelligence is increasingly defined by their approaches to energy strategy. With soaring electricity demands from AI infrastructure, sustainable and secure energy supply has become crucial to technological leadership.

The competition between the United States and China to dominate artificial intelligence (AI) is intensifying, with an underlying and critical battleground emerging in the realm of energy strategy. As AI technologies advance, the demand for electricity to power data centres and computational infrastructure is surging, transforming energy policy into a pivotal factor for future technological supremacy.

A striking example can be found in the US state of Virginia, where data centres now consume approximately 25% of the entire state's electricity. This significant energy consumption reflects the rapid expansion of AI model complexity and the resultant need for larger and faster processing capabilities, driving power demands beyond current utility growth rates.

The recent geopolitical upheavals, particularly Russia’s invasion of Ukraine, have heightened the importance of energy independence and security across the globe. In Europe, efforts to reduce dependency on Russian gas supplies have accelerated the adoption of renewable energy sources such as solar and wind power. This shift also reverberates in the strategies devised by both AI superpowers.

China’s approach is characterised by a cohesive strategy that tightly integrates AI infrastructure expansion with large-scale investments in renewable energy. The country is projected to invest as much as $275 billion in its data centre market by 2030, with a substantial portion directed towards sustainable energy solutions. Such a strategy is aimed at achieving technological sovereignty and establishing a long-term industrial advantage.

In contrast, the United States faces a more challenging energy landscape, described as fragmented and lacking a unified national framework. The US is exploring a hybrid energy model that blends the reliability of natural gas with the promise of solar power and innovations in battery storage technology. This multifaceted approach aims to balance speed, flexibility, and economic viability but is vulnerable to disruptions in any part of the energy ecosystem. The concern lies in whether this patchwork strategy can keep pace with the escalating energy needs of AI development.

Industry projections underscore the urgency of sustainable energy solutions. Gartner forecasts a fivefold increase in the availability of GPUs in data centres by 2025, signalling a steep rise in computational demand. Correspondingly, the International Energy Agency anticipates that renewable energy sources will comprise 90% of net electricity capacity adds worldwide by 2025, underscoring a global commitment to decarbonisation.

Experts highlight several pathways to enhance energy efficiency within AI infrastructures. These include adopting a diversified energy mix that stabilises supply through the integration of renewables and storage solutions, employing AI-driven optimisation to reduce energy wastage in data processing and cooling, and implementing coherent government policies that incentivise clean energy projects while fostering strategic collaboration among federal and state entities.

Recommendations for stakeholders vary accordingly: technology companies are encouraged to invest in energy-efficient hardware and seek partnerships with renewable energy providers, while policymakers are urged to craft scalable, innovation-supportive energy policies to provide market stability.

As the United States and China compete to lead in AI, it is increasingly clear that technological advancement will be closely tied to energy strategy. Whichever nation successfully aligns its energy infrastructure with the demands of AI development stands to shape the future global tech landscape. The ability to maintain energy security and independence alongside rapid innovation will be fundamental in determining dominance in the next era of AI.

Source: Noah Wire Services

More on this

https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/to-win-the-ai-race-the-us-needs-an-all-of-the-above-energy-strategy/ - Supports the discussion of energy infrastructure challenges in the US-China AI competition and the need for diversified energy strategies to meet rising computational demands.
https://www.lowyinstitute.org/the-interpreter/ai-china-us-go-head-head - Corroborates projections about AI-driven electricity consumption surges and the environmental implications of data center expansion in both the US and China.
https://www.cnas.org/press/press-release/new-cnas-report-on-the-world-altering-stakes-of-u-s-china-ai-competition - Reinforces the broader geopolitical and technological dimensions of the US-China AI rivalry but does not directly address energy specifics from the provided article.
https://www.justsecurity.org/110608/us-china-competition-ai/ - Highlights ongoing technical competition between US and Chinese AI developers but lacks direct alignment with the article’s energy policy focus.
http://www.ncuscr.org/podcast/us-china-ai-race/ - Provides general context on AI as a front in US-China strategic competition but does not cover energy infrastructure specifics.
https://news.google.com/rss/articles/CBMizAFBVV95cUxOcl81MlZHRDV3M0p6emtUSW9faW1GOWU3cG81Ti1ERHJGTFpKUmdIbVpEM2x2VGJVMlNLZzBpRHBLX2lrbkVfVVdVVDVSU0p3YzE5eVdEZThwMHl4SmQ3X2tVRDREeWlaQ1dxZFRWN2plcVVZaXRvaUdmNUNDTGQ2ZGZpQlg0TEFWenhibldWVUZHX1p3TWFxTm8wOEUxdHgxMTZqQVVJclR2U0VfQldNaG9RV3VnVHJVakpUUHZLUF9rR3NvSjREUHFaSlM?oc=5&hl=en-US&gl=US&ceid=US:en - Please view link - unable to able to access data

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative discusses ongoing geopolitical and technological trends, referencing current events such as Russia's invasion of Ukraine, which has taken place since 2022, and projections up to 2025 and 2030. No indications of outdated events or figures are present. The data centre energy usage and policy discussions align with recent developments and future forecasts, indicating the content is timely and relevant.

Quotes check

Score: 10

Notes: There are no direct quotes cited in the narrative, so no possibility of recycled or misattributed quotations. This suggests originality in the presentation of information, which increases the score for this category.

Source reliability

Score: 6

Notes: The narrative's URL leads to a Google News RSS aggregation link rather than a specific established publication, making it unclear which original publication produced the report. Without a named reputable publisher, reliability is uncertain. However, the content aligns with widely known and reported facts about AI development and energy policy trends.

Plausability check

Score: 9

Notes: The claims about the energy consumption of data centres in Virginia, the US and China's divergent strategies on AI energy infrastructure, and the projections by Gartner and the International Energy Agency are plausible and consistent with known trends in technology and energy sectors. While some figures, like China's $275 billion investment estimate, cannot be independently verified here, they fit within plausible industry forecasts.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative presents a current and plausible analysis of AI competition intertwined with energy strategy, referencing recent geopolitical developments and forward-looking projections to 2025 and beyond. The lack of direct quotes and unclear original publisher slightly limit source reliability certainty, but the information aligns well with known facts and reasonable forecasts. Thus, the content passes fact-checking with high confidence.

Artificial intelligence
Energy policy
US-China relations
Renewable energy
Data centres