How does China, with electricity costing only 8 cents per kilowatt-hour, increase prices by 13 times to sell to the United States?

The limit of computing power is electricity. In the global competition of the AI era, China leverages its electricity energy advantage to transition from selling cheap Chinese products to selling computing power.
1. The essence of AI is electricity alchemy
Previously, China turned electricity into aluminum, which only doubled in value. Now, China transforms electricity into Tokens, increasing their value by 13 times.
Basic form: 1 kWh of Chinese electricity sold directly for 0.8 yuan
Issues include transportation costs, storage, etc.
Traditional industry: Converted into aluminum ingots for export, with a value of about 1.5 yuan
Electricity is solidified into products that can be stored and transported.
AI inference: Using large models to convert inference into Tokens and sell to overseas users, with a value of about 11 yuan
Transportation costs are almost zero, settlement cycles are short, and it can be sold in any quantity.
When the end of computing power points to electricity, China, with industrial electricity prices of 0.8 yuan per kWh and the world's highest new energy installed capacity, has already gained the minting rights of the AI era. Selling Tokens is essentially selling high-value-added electricity, increasing the export value of electricity by 13.7 times.
2. Tokens are the digital containers of the 21st century
Just as containers transformed global trade, Tokens are changing the form of energy exports. Encapsulating electricity into computing power for export, with extremely low transportation costs.
Traditional electricity exports are limited by grid coverage and geopolitical issues, but Tokens can flow globally via fiber optic cables. China's surplus wind and solar power in the west can also be utilized, with chips consuming electricity turning into Tokens sought after by developers worldwide. But this is not just resource export; it’s a computing power system composed of energy, electricity infrastructure, chips, and algorithms. The quality may not be the highest, but the price is lower, providing significant competitive advantages in the market.
3. China’s advantage lies in model pricing. Despite lagging in algorithms and chips, overall, it is the most optimal. Not everything requires the best model or the best chips to process.
As the global AI industry enters an era of explosive growth of intelligent agents, AI is no longer just a dialogue box but a 24/7 digital employee. This directly leads to exponential growth in Token and API call volumes, making cost a critical factor.
Silicon Valley has top-tier algorithms but faces issues of power shortages and high electricity prices. Chinese models, with a 16-fold price difference compared to top models like Claude, are not entirely unusable. Tasks like customer service and sales, which are highly process-driven, do not require the best models. When AI enters a phase of application explosion and the gap in model capabilities is not significant, cost-performance ratio becomes even more important.
4. From Bitcoin mining to industrial computing power
In the 10 years of China's most rapid electricity development, cheap hydropower helped mine 70% of the world's Bitcoin. Today, China's computing power supports over half of the world's inference tasks, thanks to the infrastructure built at that time.
Since the 519 ban, China's computing power exports seem to have undergone a splendid transformation. Bitcoin was once digital gold; now, Tokens are digital oil (necessity). China is leveraging its well-developed industrial system to fully industrialize, cheapen, and globalize AI inference.
With the world's cheapest sockets and the most optimized computing power factories, China packages electricity at 0.8 yuan per kWh into Tokens worth 16 yuan and sells them worldwide via fiber optic cables.