The single most important technology race of our lifetime was decided by something as mundane as electrical outlets.
When AI expert Rui Ma and her team returned from touring China’s AI hubs, she posted a single sentence on X that should have triggered emergency meetings in every boardroom from Silicon Valley to Washington: “Everywhere we went, people treated energy availability as a given.”
For American AI researchers, Ma wrote, that’s “almost unimaginable.” That sentence contains the entire story of how we’re losing the most important technology race of our lifetime .
While we’ve spent decades cutting infrastructure budgets and celebrating tax breaks, China built something we can no longer compete with: a power grid that works. Not just works — overdelivers by 100%. They maintain twice the electrical capacity they need, while we operate on 15% margins that collapse during heat waves.
I’ve been tracking this disaster for years, watching our politicians frame every infrastructure investment as socialism while China quietly constructed the foundation of technological supremacy. The result? Chinese AI developers don’t think about electricity. American ones build their power plants.
The $6.7 Trillion Reckoning
McKinsey calculates we need $6.7 trillion in new data center capacity by 2030. China already has the grid to support it. We’re rationing power between AI companies and households, with households losing.
In Ohio, families pay an extra $15 monthly because data centers consume their electricity. In California and Texas, officials issue warnings when demand threatens blackouts. Our grid operates like a restaurant that’s always one customer away from running out of food.
But here’s what makes this truly pathetic: China doesn’t just have enough power — they have so much excess capacity that AI data centers help them “soak up oversupply.” They treat massive computational facilities as convenient ways to use electricity they couldn’t otherwise sell.
David Fishman, who tracks Chinese energy development, explained that: China adds more electricity demand annually than Germany’s total consumption. Entire provinces generate electricity equivalent to India’s national supply. When renewable projects can’t keep pace with AI growth, they activate idle coal plants while building more sustainable sources.
We can’t even get permits approved.
The Billionaire Extraction Economy
I keep thinking about GoPro’s founder, who extracted maximum personal wealth as CEO while his company died. When Chinese manufacturers flooded the market with knockoffs, GoPro couldn’t pivot because they’d spent everything on executive compensation instead of research and development. Now the stock trades for pocket change.
This captures American capitalism perfectly: late-stage capitalists prefer being emperors of dumpster fires rather than building sustainable kingdoms. If I created a billion-dollar company, I’d want it to last forever. But our system rewards extraction over construction.
China executes billionaires who damage national interests. We give them bailouts.
The powerful in China understand their strength depends on national capability. American elites think power comes from personal wealth accumulation. This explains why oil and gas lobbyists actively sabotage renewable energy development even as renewables become cheaper than 90% of fossil fuel projects globally.
They’re protecting quarterly dividends while China builds the infrastructure of the next century.
The Governance Catastrophe
American infrastructure projects depend on private investment seeking returns within five years. Power plants require decades to build and generate profit. The math doesn’t work, so nothing gets built.
China’s government directs money toward strategic sectors before demand materializes. They accept that some projects will fail, but ensure capacity exists when needed. This isn’t ideology — it’s basic planning.
I watched Silicon Valley funnel billions into “the nth iteration of software as a service” while energy projects begged for funding. Private capital gravitates toward quick returns while infrastructure requires patient money that doesn’t exist in our system.
The result: China operates from abundance while we scramble for scraps.
The Technical Reality
Elon Musk and Sam Altman saw this coming years ago. Why do you think they’re building private power infrastructure? Altman attempted to acquire nuclear plants because he recognized that the grid couldn’t handle the demands of artificial intelligence.
But private power generation isn’t more efficient than properly designed grids. It’s evidence our public infrastructure failed so completely that billionaires think they can do better. They can’t — they’re just wealthy enough to build expensive workarounds.
I predict the next phase involves framing this as a new Manhattan Project. Anyone questioning massive public spending on AI infrastructure will be labeled unpatriotic. Meanwhile, regular Americans will compete with tech companies for electricity, paying premium prices for basic power.
