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AI is reshaping US-China tech race – can electricity tilt the balance?

Already home to world’s largest power system, Beijing moves to lock in advantage through record investment

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A drone photo taken on December 16, 2025, shows a power transmission line in east China’s Anhui province. Photo: Xinhua
Luna Sunin Beijing,Themis QiandZhang Shidongin Shanghai
China’s state-owned power grid giant has pledged to increase fixed-asset investment by 40 per cent over the next five years, at a time when some analysts view electricity capacity as a strategic asset in the US-China rivalry amid soaring demand from artificial intelligence (AI) and other power-hungry industries.

The State Grid Corporation of China expects the investment amount to reach 4 trillion yuan (US$574 billion) through 2030, a company record, as it accelerates efforts to build a “new-type power system” – a more efficient and flexible grid designed to integrate renewables.

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The expansion could raise electricity’s share of end-use energy consumption to 35 per cent, with about 200 gigawatts of wind and solar capacity added annually, the company announced on Thursday.

The massive investment comes as the world grapples with the enormous energy appetite of AI. The International Energy Agency estimated that from 2024 to 2030, China’s data centres would consume 170 per cent more electricity while the consumption in the US would increase 130 per cent, with both accounting for nearly 80 per cent of global growth.
However, China and the US – the world’s two AI powerhouses – face completely different pictures. China tops all countries with a third of global electricity generation volume due to aggressive government planning, while the US is facing an intensifying power shortage, prompting tech giants from Google to Meta to acquire power assets to secure supply for training their AI models.

“In the AI race, computing power comes down to chips, electricity and algorithms – and electricity is the one area where China holds an undeniable advantage,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank affiliated with the provincial government.

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