AI Supremacy Requires Reliable Electricity

What McKinsey & Company calls “The Race to Power AI” boils down to the emerging struggle between the U.S. and China for supremacy in artificial intelligence (AI) and the capabilities of its associated data centers. General estimates are that AI will increase U.S. power demand 10-20% over the next five to seven years alone. In a new report, Rocket Fuel for America’s AI Moon Shot, Dan Turner, Executive Director of Power the Future, has compared the situation to the space race between the U.S. and Russia in the 1950s and 1960s: “The race to develop artificial general intelligence will be the most significant economic and national security clash between the world’s great powers over the next generation.”

While the U.S. has a clear lead in the development of both AI and data centers, China has demonstrated its commitment to be self-reliant on these new technologies to broaden its global reach for economic, military, and national security reasons. AI requires 24/7 power, and China is rapidly putting a plan in place to assure reliable electricity that will attract and support data centers. The U.S. does not have a coherent and continuing energy plan of any type. China’s central planning allows for development and sustainability, while the U.S. approach to energy changes every four years. The fact that organization and foresight are crucial in energy planning is demonstrated by energy thinker Robert Bryce’s warning: China has a chokehold on about three dozen key elements in the Periodic Table, with an average market share of around 70% for each.

China has recommitted to its reliance on coal power. In 2024, construction began on over 94 Gigawatts (GW) of coal capacity – the most since 2015 and more than half of the U.S. existing coal fleet. The Global Energy Monitor reports that China has 58 GW of coal announced, 158 GW in permitting, 204 GW under construction, and 1,171 GW operating, for a grand total of 1,591 GW of coal. This is more than the entire electricity generation capacity of the EU and Japan combined (read those two sentences again). Two points need to be emphasized: (1) the Chinese coal fleet is one of the youngest, most efficient in the world, so the existing coal units still have many decades of operation and (2) many of the mega plants the Chinese are bringing online are supercritical or ultra-supercritical facilities which produce significantly fewer emissions than standard coal plants. China leads in building advanced coal plants and is home to the most efficient units in the world.

In stark contrast, the U.S. seems intent on wiping coal-based electricity from the energy landscape. Over 300 coal plants have closed since 2010, and coal generation has declined from 45% of the Nation’s power to 16% today. Most importantly, just published in April, the 2025 Annual Energy Outlook (AEO) by the U.S. Energy Information Administration (EIA) projects that from 2025 to 2035 coal generating capacity will plummet from 164 GW to only 3 GW. In concert, coal generation will decline 93% in just 10 years. This seems foolish since the U.S. has some 25-30% of the world’s coal, which is even more than China. And we already know that the U.S. natural gas industry is ready to meet this great challenge: “Chevron exec says data center gas plans ‘moving very quickly.”

Lest one think the U.S. is relying on new nuclear plants to serve the baseload needs of data centers, the 2025 AEO projects both nuclear capacity and generation will decline by 2040. As Dan Turner at Power the Future points out, the Nuclear Regulatory Commission is a model of bureaucratic inefficiency. Since 1990, only five applications have been approved and only two new plants have been built: the Vogtle reactors in Georgia.

Given this troubled history over the past 35 years, it is difficult to see nuclear making a major contribution in the next two decades unless excessive bureaucratic hurdles are rapidly eliminated. Reality check: “Trump’s Nuclear Plan Faces Major Hurdles.” Meanwhile, China currently has 58 operable reactors with a total capacity of 60 GW. At least 30 reactors, with a total capacity of 34 GW, are under construction. When it comes to winning the AI race, China means serious business: “China Unveils the World’s First AI-Powered Underwater Data Center!’’

To be fair, the EIA’s AEO does project substantial new capacity by 2040 but most of it is intermittent and non-baseload solar and wind of clear limited use to data centers without a large amount of backup batteries. And the caveat: the China chokehold looms large over this forecast: China controls 75% of solar panel manufacturing, 60% of the world’s turbine production capacity and confirmed by a May 21 headline from an EIA press release: “China dominates global trade of battery minerals.”

There is no doubt that President Trump has taken positive steps on both coal and nuclear, but the familiar issue of a sustainable plan remains. The President’s term ends in only three and a half years. After that, is it back to business as usual while China’s baseload coal plants accommodate for the next generation of data centers.

And finally, we must remain clear for those saying that we should rely on just wind and solar here in the U.S. This is a provably dangerous position that cannot be taken seriously. We already know that the recent power outage in Spain and Portugal has raised questions about the reliability of renewables.