The two constraints on AI are effectively electricity and chips.
China and the U.S. have different advantages regarding both:
- China wins on raw electric power (added 543 GW of new capacity last year), but their ability to produce advanced chips is still a few years behind.
- The U.S. is ahead on chips, dependent on an international supply chain. NVIDIA and AMD design leading processors, while Taiwan’s TSMC manufactures many of them. This means access to Taiwanese factories is a critical part of American AI leadership.
The bottleneck for America is clear: we are short on electricity.