Elon Musk warned the biggest issue hampering AI advancement in the United States is a problem Chinese competitors don\u2019t have.<\/p>\n
In a conversation<\/a> in Davos, Switzerland, with BlackRock<\/a> CEO and World Economic Forum interim chair Larry Fink, Musk said AI chip production is increasing exponentially, but electricity is slow to being made available, hampering the efficiency of AI data centers training and deploying AI models.<\/p>\n \u201cI think the limiting factor for AI deployment is fundamentally electrical power,\u201d Musk said. \u201cIt\u2019s clear that we\u2019re very soon\u2014maybe even later this year\u2014we\u2019ll be producing more chips than we can turn on.\u201d<\/p>\n The U.S. has been grappling with an outdated grid system<\/a>, as the result of decades of underinvestment and an aging infrastructure. As tech companies increasingly rely on grid operators for electrical power, reliability issues and production limitations have threatened the speed of AI implementation, raising investor concerns<\/a> of an AI bubble, as well as resignation the U.S. has already lost the battle with Chinese tech.<\/p>\n Two massive data centers in Nvidia\u2019s Santa Clara, Calif., hometown may sit empty for years<\/a> waiting for electricity to power them, according to energy experts. Meanwhile, the massive increase in demand, combined with the need for updated infrastructure, have driven up electricity bills<\/a> for the average American.<\/p>\n Earlier this month, the Trump administration and 13 bipartisan governors mounted pressure<\/a> on operators of the country\u2019s largest grid, PJM Interconnection, to boost power supplies, as well as hold an auction for tech firms to make offers on 15-year contracts to build power plants, which would transfer the cost of electricity away from consumer and to data center operators.<\/p>\n \u201cWe know that with the demands of AI and the power and the productivity that comes with that, it\u2019s going to transform every job and every company and every industry,\u201d Interior Secretary Doug Burgum told reporters last week. \u201cBut we need to be able to power that in the race that we are in against China.\u201d<\/p>\n During his remarks at the forum in Davos on Wednesday, President Donald Trump encouraged tech companies to build their own nuclear plants<\/a> amid the AI push, which he claimed the administration would approve in just three weeks\u2014although these historically take years to approve.<\/p>\n China\u2019s solar edge over the U.S.<\/p>\n Reifying the fear of many AI investors<\/a>, China is already leaps ahead of the U.S. when it comes to production capacity, and the country isn\u2019t saddled with the same limitations as the U.S., Musk said at Davos. The country is primarily reliant on solar power, seen as a less expensive alternative than nuclear power, with quicker deployment and fewer safety risks.<\/p>\n \u201cChina\u2019s growth in electricity is tremendous,\u201d he said.<\/p>\n According to the Global Energy Monitor\u2019s Solar Tracker<\/a>, China has nearly four times the amount of operational electricity from solar power than the U.S. Including potential power, China is expected to have 1,118,442 MWac, or electrical power output, from solar energy compared to the U.S.\u2019s 237,947 MWac.<\/p>\n \u201cSolar is by far the biggest source of energy,\u201d Musk said.<\/p>\n Musk claimed powering the U.S. with solar energy would require very little space, only a 100-mile-by-100 mile square of solar fields needed to power the entire country.<\/p>\n But U.S. policies have thwarted efforts to harness and deploy solar power. Despite urging grid operators to take action to increase production capacity, the Trump administration has opposed a pivot to solar energy, stripping subsidies<\/a> for renewable energy sources it claimed \u201ccompromises our electric grid.\u201d<\/p>\n The White House did not immediately respond to Fortune\u2019s request for comment.<\/p>\n