China's secret weapon in AI race with US? Lots of cheap energy

Data centres that train and run AI models require very large amounts of electricity. A typical facility can use power comparable to 100,000 households, while next-generation hyperscale sites can consume electricity equivalent to two million homes. China has a clear advantage because it generates more than twice as much electricity as the US, and that gap is expected to widen through state-led investment in the energy grid. China is also adding far more generation capacity than the US over the next five years, with much of the growth coming from renewables such as solar and wind. China’s AI strategy links data-centre expansion with its expanding renewables sector through the East Data, West Computing initiative.

"China's access to an abundant supply of cheap electricity places it in the ideal position to meet such colossal energy demands. China's access to an abundant supply of cheap electricity places it in the ideal position to meet such colossal energy demands. 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's energy grid."

"A typical data centre can consume as much electricity as 100,000 households, while next-generation hyperscale facilities can gobble up as much power as two million homes, according to the International Energy Agency (IEA). Data centres, the sprawling computing facilities needed to train and run AI models, require vast amounts of energy."

"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. Much of that extra capacity will be in the form of renewables such as solar and wind. 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."

"A key element of China's AI strategy involves integrating its data centres into its rapidly expanding renewables sector. Under the East Data, West Computing initiative, China's government is concentrating the construction of new data centres in the country's sparsely populated interior, where land and renewable energy sources are abundant compared with the heavily built-up eastern seaboar"

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