A new report from Jefferies’ famous “Greed & Fear” series has made a bold claim: the country that controls cheap, abundant, and uninterrupted electricity will win the global AI race. And according to analysts, China—not the United States—is emerging as the strongest contender.
As AI models grow larger and demand unprecedented computing power, the world’s biggest tech companies agree that “energy scarcity”—not GPUs—is now the biggest threat to AI innovation.
Energy, Not Technology, Will Decide the AI Leader
Nvidia, Microsoft, and Amazon executives have confirmed that while chip production is expanding rapidly, data centers simply don’t have enough power to run next-generation AI systems.
Nvidia CEO Jensen Huang even admitted in London that “electricity in China is practically free”, giving the country a decisive edge.
The Jefferies report reasons that AI leadership will belong to the nation capable of sustaining non-stop, low-cost energy supply — a space where China is pulling far ahead of the US.
Why China Is Taking the Lead
1. Unmatched Solar & Battery Expansion
China added 240 GW of solar power in the first nine months of 2025, exceeding the entire installed capacity of the United States (178 GW).
Last year alone, China added 429 GW of new power capacity, creating a massive electricity surplus — ideal for power-hungry AI data centers.
2. Heavy Power Subsidies for Data Centers
Beijing has instructed provinces to offer up to 50% electricity subsidies for data centers using domestic chips.
This pushes costs dramatically lower while strengthening China’s self-reliance in critical technologies.
3. Strategic Autonomy, Not ESG Pressure
Unlike the US, where environmental regulations slow down renewable expansion, China aggressively prioritizes cost efficiency and energy independence.
This helps China scale AI operations without political resistance or climate-policy bottlenecks.
US Faces a Power Bottleneck
Tech CEOs in the US have openly acknowledged the crisis:
●Satya Nadella said several Microsoft data centers could not run at full capacity due to power shortages.
●Andy Jassy of Amazon noted that energy availability—not chips—is the biggest limiting factor.
With aging power infrastructure and slower renewable deployment, the US struggles to match China’s speed.
Is China the Next AI Superpower?
Jefferies concludes that AI supremacy will be won by the nation that controls energy, not just computational hardware. Training and deploying trillion-parameter models requires uninterrupted electricity on a massive scale — something China is currently better positioned to provide.
With low-cost energy, vast solar production, heavy state subsidies, and energy-first policies, China has taken a commanding lead in the AI power race, challenging long-standing assumptions about US dominance.
