Can China achieve dominance in the artificial intelligence field?

Investing.com – Over the next decade, China could rival or even surpass the United States in the field of artificial intelligence. However, the key to achieving this goal is not chips but electricity.

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According to a recent analysis by Bernstein, leadership in artificial intelligence ultimately depends on computing power, which in turn depends on energy, data centers, and semiconductor capabilities. Currently, the U.S. leads with about 35 zettaFLOPS of AI computing power, while China has 5 zettaFLOPS, roughly 15% of the U.S. level.

However, China’s structural advantage lies in energy. Its electricity generation is more than double that of the U.S. and is increasing capacity at an unprecedented rate, adding over 500 gigawatts annually—more than the total of other regions combined. This enables China to expand data centers on a large scale, even if its chip efficiency remains relatively low.

Bernstein estimates that if China leverages its scale advantage to compensate for semiconductor disadvantages, it could reach comparable computing power levels to the U.S. by 2035. This would require massive investments, nearly $1 trillion in AI data center capital expenditure, along with rapid expansion of power infrastructure and battery storage.

In a more aggressive scenario, if electricity is the only limiting factor, China could even surpass U.S. computing power, potentially reaching more than three times the U.S. level by 2035.

Nevertheless, key bottlenecks remain. China lags in advanced semiconductor technology; currently, domestic AI chips operate at about a quarter of the efficiency of comparable U.S. products, though this gap could narrow to over 50% by 2035. Export controls and limited access to cutting-edge manufacturing tools continue to pose risks.

Therefore, this race is asymmetric—while the U.S. leads in chips and software, China dominates in energy, manufacturing scale, and cost efficiency. If energy ultimately becomes the ultimate constraint on AI growth, China’s advantages could be decisive.

The outcome remains uncertain, but this analysis suggests that the key factor in determining AI dominance will largely depend on megawatt-scale electricity, not just microchips.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.