{"id":699951,"date":"2026-05-28T11:58:12","date_gmt":"2026-05-28T11:58:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/699951\/"},"modified":"2026-05-28T11:58:12","modified_gmt":"2026-05-28T11:58:12","slug":"chinas-secret-weapon-in-ai-race-with-us-lots-of-cheap-energy-technology-news","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/699951\/","title":{"rendered":"China\u2019s secret weapon in AI race with US? Lots of cheap energy | Technology News"},"content":{"rendered":"

In the race against China for AI supremacy, the United States dominates when it comes to access to the most cutting-edge semiconductors.<\/p>\n

But when it comes to powering the huge data centres that run on AI chips, China holds the clear advantage.<\/p>\n

Recommended Stories list of 4 itemsend of list<\/p>\n

That\u2019s because data centres, the sprawling computing facilities needed to train and run AI models, require vast amounts of energy.<\/p>\n

A typical data centre can consume as much electricity as 100,000 households, while next-generation \u201chyperscale\u201d facilities can gobble up as much power as two million homes, according to the International Energy Agency (IEA).<\/p>\n

China\u2019s access to an abundant supply of cheap electricity places it in the ideal position to meet such colossal energy demands.<\/p>\n

China already generates more than twice as much electricity as the US, a lead that is expected to widen amid an aggressive state-led investment in the country\u2019s energy grid.<\/p>\n

BloombergNEF, a research provider, estimates that China will add more than six times as much electricity generation capacity as the US over the next five years.<\/p>\n

Much of that\u00a0extra\u00a0capacity\u00a0will\u00a0be in the form of renewables such as\u00a0solar and\u00a0wind.<\/p>\n

In 2025 alone, China increased its wind and solar power capacity by more than 430 gigawatts, accounting for more than half of the additional capacity in the renewables added globally that year.<\/p>\n

\"Solar\"Tibetan sheep graze at a solar farm in Hainan prefecture, Qinghai province, China on July 1, 2025 [File: Ng Han Guan\/AP]<\/p>\n

A key element of China\u2019s AI strategy involves integrating its data centres into its rapidly expanding renewables sector.<\/p>\n

Under the \u201cEast Data, West Computing\u201d initiative, China\u2019s government is concentrating the construction of new data centres in the country\u2019s sparsely populated interior, where land and renewable energy sources are abundant compared with the heavily built-up eastern seaboard.<\/p>\n

Earlier this month, Beijing announced the start of operations at the country\u2019s first \u201clarge-scale\u201d renewable energy project to be linked directly to a data centre.<\/p>\n

The 500-megawatt wind and solar project, located in the northwestern Ningxia region, will power a cloud data centre operated by China Datang through a \u201cdedicated transmission line\u201d, China\u2019s management body for state-owned enterprises said in a statement on May 12.<\/p>\n

\u201cIn the long run, the country\u00a0that can provide cheap, stable, low-carbon electricity\u00a0will have a major advantage in AI infrastructure,\u201d Qiyang Xiong, a PhD candidate at Renmin University of China\u00a0who\u00a0specialises\u00a0in AI and energy policy, told Al Jazeera.<\/p>\n

\u201cChina is a global leader in solar, wind and ultra-high-voltage transmission,\u201d Xiong said.<\/p>\n

\u201cThis gives it an advantage in supplying western data centre clusters with large volumes of relatively cheap, clean electricity.\u201d<\/p>\n

Narrowing the gap<\/p>\n

For now, the US still has the largest data centre footprint by a wide margin.<\/p>\n

According to Stanford University\u2019s AI Index, the US had an estimated 5,427 data centres in 2025, compared with 449 in China.<\/p>\n

The US accounted for 45 percent of the 415 terawatt-hours of electricity consumed by data centres in 2024, followed by China and Europe with 25 percent and 15 percent, respectively, according to the IEA.<\/p>\n

In 2026 alone, Silicon Valley\u2019s Amazon, Microsoft, Meta and Alphabet are projected by Morgan Stanley to spend $630bn on data centres and other AI-related investment, vastly more than Chinese tech giants such as Alibaba, Tencent and ByteDance.<\/p>\n

But as China constructs data centres at a blistering pace \u2013 its number of data centre racks grew 30 percent annually from 2016 to 2023, according to the China Academy of Information and Communications Technology \u2013 the gap between the superpowers is rapidly narrowing.<\/p>\n

Facing US export controls<\/a> on top-end Nvidia chips manufactured by the Taiwan Semiconductor Manufacturing Company (TSMC), China has increasingly turned to partly state-owned Semiconductor Manufacturing International Corporation (SMIC) to supply chips designed by local tech firms such as Huawei.<\/p>\n

By 2030, China\u2019s data centre capacity is expected to reach 60 gigawatts, nearly double its current level, according to an analysis by Rystad Energy, taking up 2.3 percent of the country\u2019s total electricity demand.<\/p>\n

\"SMIC\"A logo of China\u2019s Semiconductor Manufacturing International Corporation is seen at the China International Semiconductor Expo in Shanghai, China, on October 14, 2020 [File: Aly Song\/Reuters]<\/p>\n

\u201cChina\u2019s large manufacturing base and less stringent regulatory environment mean that the construction of data\u00a0centres\u00a0and supporting energy infrastructure can happen far more rapidly than in the US,\u201d Leah Fahy, senior economist for China at Capital Economics, told Al Jazeera.<\/p>\n

\u201cModular Huawei data centres can now be constructed in six months, while equivalents in the US take at least a year,\u201d Fahy said.<\/p>\n

Power grids under strain<\/p>\n

Meanwhile, there are already signs that\u00a0the\u00a0AI\u00a0rollout in the US is\u00a0bumping up against\u00a0power constraints.<\/p>\n

Energy consultancy Wood Mackenzie said earlier this year that the limitations of the US energy grid had resulted in a 50 percent quarter on quarter drop in new data centre projects at the end of 2025.<\/p>\n

Technical limitations have been compounded by a growing backlash against data centres within communities across the US \u2013 driven partly by the strain the facilities place on local grids \u2013 a challenge not faced by China, where opposition to the government is heavily restricted.<\/p>\n

At least 36 data\u00a0centres\u00a0were blocked or\u00a0stalled\u00a0in the US between May 2024 and June 2025, according to Data Center Watch, a research project by AI security company 10a Labs.<\/p>\n

US tech leaders, including Tesla\u2019s Elon Musk, Nvidia\u2019s Jensen Huang and OpenAI\u2019s Sam Altman, have openly acknowledged China\u2019s edge in the energy domain.<\/p>\n

\u201cThe limiting factor for AI deployment is fundamentally electrical power,\u201d Musk said in an interview at the World Economic Forum in January.<\/p>\n

\u201cVery soon, maybe even later this year, we\u2019ll be producing more chips than we can turn on \u2013 except for China. China\u2019s growth in electricity is tremendous.\u201d<\/p>\n

\"Musk\"Elon Musk attends the 56th annual World Economic Forum (WEF) meeting in Davos, Switzerland, on January 22, 2026 [File: Denis Balibouse\/Reuters]<\/p>\n

Advancing AI is now an \u201celectricity problem as much as a chip problem\u201d, said Howard Yu, director of the Center for Future Readiness at IMD Business School in Lausanne, Switzerland.<\/p>\n

\u201cThe\u00a0winners of this cycle\u00a0will own the silicon, the power contracts, and the cooling\u00a0water, in that order, and China has built its strategy around the input it controls,\u201d Yu\u00a0told Al Jazeera.<\/p>\n

China\u2019s energy advantage is not\u00a0without its own limitations.<\/p>\n

Despite Beijing\u2019s push to meld its AI ambitions with the wind and solar resources of its remote western regions, most data centres are still located in and around eastern megacities such as Beijing, Tianjin, Shanghai, Guangzhou and Shenzhen.<\/p>\n

\u201cThese places also face power supply difficulties and have introduced restrictions on new data centres,\u201d Anders Hove, a senior research fellow at the Oxford Institute for Energy Studies, told Al Jazeera.<\/p>\n

Hove added that China\u2019s power grid also suffers from a high degree of fragmentation that prevents the seamless flow of electricity between regions.<\/p>\n

\u201cChina\u2019s power system is organised and dispatched mainly at the provincial level, with transmission corridors acting primarily as one-way power flows,\u201d Hove said.<\/p>\n

\u201cThough the central government has called for regional wholesale markets and more granular trading intervals, this is proceeding slowly,\u201d he added.<\/p>\n

\"DataChinese Premier Li Keqiang (3rd R) visits Tencent\u2019s data centre in Guiyang, Guizhou province, China, on July 7, 2020 [File: cnsphoto via Reuters]Quality control<\/p>\n

Though rapid, China\u2019s data centre rollout has also faced quality issues, said Kyle Chan, a research fellow at the Brookings Institution who specialises in Chinese tech and industrial policy.<\/p>\n

\u201cThey are trying to build heterogeneous chip clusters that group together different hardware systems. This makes it more challenging to run AI workloads,\u201d Chan told Al Jazeera.<\/p>\n

\u201cThere have been issues with the build quality of some Chinese data centres, particularly when the developer does not have proper experience with such a complex project,\u201d Chan said.<\/p>\n

China has also has some way to go to narrow the gap between data centre capacity and utilisation, said IMD Business School\u2019s Yu.<\/p>\n

\u201cBeijing\u2019s own estimates put it at 20 to 30 percent, and even SMIC\u2019s chief has warned the new capacity could sit idle,\u201d Yu said.<\/p>\n

\u201cOne way to frame the whole race: the US has the chips and is short on power, while China has the power and is short on chips. Each is sprinting to fix its own bottleneck.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"In the race against China for AI supremacy, the United States dominates when it comes to access to…\n","protected":false},"author":2,"featured_media":699952,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,77,64,63,6073,512,164,10523,44,7086,105,10649],"class_list":["post-699951","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-asia-pacific","tag-au","tag-australia","tag-business-and-economy","tag-china","tag-economy","tag-international-trade","tag-news","tag-science-and-technology","tag-technology","tag-trade-war"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/699951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=699951"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/699951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/699952"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=699951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=699951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=699951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}