The U.S. grid is so weak, the AI race may be over

https://fortune.com/2025/08/14/data-centers-china-grid-us-infrastructure/

95 112 11 months ago

Even in this article, it repeatedly refers to building out infrastructure in advance of an obviously approaching future need as "oversupply".

This is almost a cliche in reporting on China that seems to reflect a serious blindpsot in western media and/or business attitudes.

You can find plenty of articles complaining about "overcapacity" of battery factories in China even as they double in capacity and output each year.

Chinese electricity generation went from 4,000 TWh (the same as the US) in 2010 to double that in 2020. The US was basically the same after 10 years.

So a 100% "oversupply" in 2010 would be a zero percent oversupply within a decade given China's growth.

Most telling to me is that decarbonisation and electrification of transport and heating has long been known to require a doubling(!) of electricity production for developed nations (and a similar increase in developing nations where it gets hidden by other growth).

Apparently the US simply never had a plan to achieve that, and amazingly it still isn't part of the conversation around AI power. Instead they're just claiming the best parts of the existing power systems and passing the costs onto local consumers.

plastic-enjoyer3• 11 months ago

Apparently the US simply never had a plan to achieve that, and amazingly it still isn't part of the conversation around AI power. Instead they're just claiming the best parts of the existing power systems and passing the costs onto local consumers.

I wonder if this is more of a cultural thing, meaning Western cultures being more aligned to short-term gains instead of long-term gains. I mean, look at the Dujiangyan irrigation system that was build 2500 years ago and is still maintained until today. This isn't something the Western world would even consider.

Spooky232• 11 months ago

The structure of the United States government is a compromise balancing large vs. small states interests and slavery.

The core defect in the design is the Senate and the way states were admitted. We have a territory/colony with limited political rights that has a population greater than the bottom four states.

Those small states exert enormous influence and essentially ensure a weird conservative dynamic that anchors a lot of social issues.

Not because of the politics of the day - because resource extraction is always conservative by nature as the core aspect of the business is minimizing overhead cost. Agriculture flipped into a purely extractive business as people have been removed from it.

dkiebd• 11 months ago

Sanitation and road infrastructure built during the Roman Empire is still in use today.

roenxi4• 11 months ago

The West have been executing a long-range plan for 30 years on this one, the lack of power plants is intentional. There have been any number of roadblocks and people working hard to prevent the West doing specifically what the Chinese have done with the goal of maintaining the high air quality that Western countries tend to enjoy.

If anything the West's culture has been doing more long term planning. It is quite difficult to force an economy not to produce something.

BlarfMcFlarf• 11 months ago

In the USA, any non-private government investment is considered to be foolish and doomed at best, and an existential threat to business at worst. The best we can do is “public-private partnership” where all the profits get absorbed by middle men, preventing virtuous cycles and still leaving a cap on risk and future planning.

el_jay• 11 months ago

While there is certainly an argument to be made that many contemporary “Western” Pseudo-Christian Superempire nations face a crisis of short-termism, there are also ancient bits of “Western” infrastructure like the Roman aqueducts still in use today - off the top of my head, the Aqua Virgo which supplies Rome’s Trevi Fountain, dated either 19BC or 19AD, I forget; Spain’s Segovia Aqueduct from the first century AD; and the Pont du Gard in Nîmes, from the same period.

Not quite as old, or at the scale of the Dujiangyan system, but still evidence that the “Western” culture did once build for long term. Less ancient, but more indicative, are the European cathedrals built by multiple generations over a century.

snowwrestler2• 11 months ago

I think it’s likely you are just not familiar with examples of U.S. long-term planning if you’re citing water movement as an area where China is doing better.

mathiaspoint• 11 months ago

The main public reasons for preventing expansion of power infrastructure were environmental. That's at least nominally very forward looking. Ironically if we had taken China's "burn everything today and figure tomorrow out when it comes" approach we'd actually be better prepared for this.

roenxi4• 11 months ago

The simplest explanation is this is political language. People in politics use something close to doublespeak with they have two words for the same act, one good and one bad (terrorist/freedom fighter for example). The word used is chosen based on whether they think the situation is good or bad for their personal interests.

So in this case the pair is something like oversupply/abundance. Same thing, but one word for when it favours the speaker and one when it doesn't. I think he just means the Chinese are willing to build whatever if it makes commercial sense.

dluan• 11 months ago

I'm old enough to have seen this shift happen first hand. I remember the language being used in the early 90s when US-China relations were great, with evening news clips of smiling Bill Clinton and Jiang Zemin yukking it up as hundreds of thousands of jobs were offshored to China to American politicians and industrialists delight.

energy123• 11 months ago

You either want a plan like China or an absence of planning like Texas. Either help like China or get out of the way like Texas. Two places that can actually build energy. Don't be like California where the government doesn't help while also getting in the way.

tw045• 11 months ago

The same Texas that has statewide power outages every time it gets below freezing (despite knowing for 25+ years it’s a problem) because of their lack of regulation and central planning?

Let’s not be anything like Texas.

misja111• 11 months ago

Ehm, you mean Texas, that recently passed a bill that added restrictions for new solar and wind energy plants? https://seia.org/news/solar-industry-statement-on-texas-sena...

hollywood_court• 11 months ago

Texas? The same Texas that can't keep their power on during storms?

dathinab3• 11 months ago

You mean the same Texas where

- many of the most influential people are invested into Oil and similar

- the political stance had been for a long time that "there should be a fair competition" between energy sources ... while subventionieren non renewable and trying everything they can to prevent subventions for renewable

- the same Texas which once it realized solar is competitive in Texas without subventions, has been non stop looking for ways to actively hinder solar (while still subvention the non-renewable sector)

- the same Texas which is by now even internationally known to have a very brittle power grid

DonHopkins• 11 months ago

Why mess with Texas when it's so good at messing with itself?

There are at least 120 people, including more than 35 children, who just drowned because Texas is so unjustifiably arrogant about being messed with by experts and scientists and educators and government regulations.

I wish the modern Texas secession movements the best of luck, and hope they get exactly what they deserve, including my thoughts and prayers!

https://en.wikipedia.org/wiki/Texas_secession_movements

corimaith2• 11 months ago

There's nothing "obvious" in hindsight about the explosion in LLMs in 2023 and thus the increased energy demand, and the China certainly wasn't building for that.

It very much was overcapacity as a way to keep the construction and manufacturing employed even when most profitable opportunities have been realized. Of course, the long cost of that is involution and lack of nicer jobs as capital is malinvested into diminishing returns. The ironic thing is that idea of overcapacity itself is acknowledged by the CCP in their calls to end price wars and involution

I do think there’s is a very interesting dynamic in this meta argument; over the past 5 years or so, the “debunkers” have taken issue with “whistleblowers” arguments towards first zero covid, then local government debt, and now overcapacity and lack of consumer demand and “debunked” these as all being not an issue, only for the central government to turn around and end Zero Covid, rein in LGFV lending, and now the current crackdown on “disorderly competition” and mass dispersal of consumption vouchers. English Pro-China commentators don't appear to be well aligned with the actual views in China!

rafaelmn• 11 months ago

I have a feeling that this kind of efficiency/capacity analysis is similar to that joke about economist designing a human, instead of having two kidneys you have 5 people sharing one. I am a pro market guy for a lot of things, but what happens when you let the market operate something like basic infrastructure is everyone is shipping their shit/sewage in trucks and running a diesel power generator in their back yard.

bryanlarsen• 11 months ago

There are four things increasing energy demand in the US at roughly the same rate, each very roughly about 1% per annum:

- increasing demand due to GDP & population growth - increasing demand due to the increased use of air conditioning due to global warming - increased demand due to EV's and other decarbonization efforts - increased demand from AI

Only one of those 4 things wasn't highly predictable. A robust build out for the first three would have gone a long way to covering the fourth. In the past increased demand was covered by increased efficiency in heating and lighting, but those gains are slowing, and Trump's gutting of regulations will reverse them.

elric• 11 months ago

Are there any plans for significant investments in the US grid(s)? IIRC the entire US doesn't even have a single interconnected grid, with Texas having their own for some reason.

European grids aren't that much better either, loads of investments needed in order to connect more renewables. Some areas already can't handle the load from solar panels/electric vehicles. Everyone seems to know that this is both costly and necessary, but not much seems to be happening. Maybe these things simply take time?

mschuster912• 11 months ago

with Texas having their own for some reason.

That reason is that Texas wants to avoid federal regulation [1] - regulation that would have prevented the large ass blackout a few years ago in the winter. But hey, 702 deaths [2], a small price to pay for freedom of regulations!

Everyone seems to know that this is both costly and necessary, but not much seems to be happening. Maybe these things simply take time?

They take money and political willpower. Both are in short supply - electricity rates here in Europe are already high (and rates in the US very low), so utilities try to avoid pissing off consumers even more, and political willpower for billions of dollars of investment isn't there either as thanks to decades of austerity and trickle-down ideology there is no tax base to pay for it any more.

[1] https://en.wikipedia.org/wiki/Texas_Interconnection

[1] https://en.wikipedia.org/wiki/2021_Texas_power_crisis

richwater2• 11 months ago

regulation that would have prevented the large ass blackout a few years ago in the winter.

They also produce the most renewable power in the country. If you account for externalities prevented by this (fossil fuel induced damage and deaths), who is looking good now?

https://en.wikipedia.org/wiki/List_of_U.S._states_by_renewab...

sam_lowry_• 11 months ago

Renewables bring the problem of IoT hacks that down the grid, see https://media.ccc.de/v/why2025-90-horus-scenario-2-0

And we need capable governments and EU institutions to fix that instead of doing stupid stuff like organizing conferences on quantum computing.

htrp• 11 months ago

Texas has its own grid so that is not subject to federal regulation. blame ercot

petcat4• 11 months ago

Texas also produces the 2nd most renewable energy in the country (wind by far + solar) behind California. That achievement was coordinated by ERCOT.

Texas's renewable energy buildout was entirely due to state-level policy and economics, not federal mandates, which have sorely lagged in other states.

boricj• 11 months ago

European grids aren't that much better either, loads of investments needed in order to connect more renewables.

On one hand, Spain and Portugal recently suffered a complete blackout. On the other hand, instead of cascading the blackout France shrugged it off.

The last time there was a country-wide blackout in France was back in the seventies. I'm not saying our grid infrastructure is perfect, but here we're not worried about losing electricity for an entire week whenever there's a winter storm.

alecco3• 11 months ago

The Iberian peninsula blackout was caused by poor planning and over-subsidizing solar. When there's a lot of sunlight and not much demand the prices fall drastically so nuclear plants were turned off to stop losing money. The problem is nuclear energy works as a sort of pacemaker for the whole grid. For months there were warnings of wild fluctuations but the Socialist coalition government ignored them. They had appointed a politician with good optics (a rabid "green"/feminist) to manage the grid who just doubled down on policy until the blackout.

https://en.wikipedia.org/wiki/2025_Iberian_Peninsula_blackou...

And France might be good today but it is playing with disaster with very old nuclear plants.

https://www.lemonde.fr/en/france/article/2023/02/03/the-long...

Amortize France's 56 existing nuclear reactors as much as possible – which are 37 years old on average currently – is part of EDF's strategy. The highly-indebted company, which is in the process of becoming 100% state-owned again, intends to "make the best use" of its "industrial heritage," Lewandowski also told Le Monde.

IMHO the whole EU should do an overhaul and make a reasonable plan to have a decent and stable grid. Some of the best companies and universities for nuclear power are in Europe! The continent should get rid of the rabid "greens". But sadly they always manage to stay in power, even if they get less than 20%! In left-wing coalitions like Spain and France they mark the agenda. And Germany's new "center-right" government needs the "greens" so they have a lot more power than they should. They talk about a plan and nuclear but there's zero funding. It's very sad.

tiledjinn• 11 months ago

texas has its own so that it doesn't need to meet the regulations of the others

idiotsecant• 11 months ago

The US has several dc interties between grid sections. This is a good thing. Texas is a political island, not a good thing.

roxolotl• 11 months ago

Yes there were plans. A modest portion of the Infrastructure Investment and Jobs Act of 2021(Bipartisan Infrastructure Bill) and the Inflation Reduction Act involved grid modernization. Some direct grid investment, some around electric vehicles, some in nuclear and other generation. Both were targeted on day one and funds have largely been revoked or tied up in court. https://www.whitehouse.gov/presidential-actions/2025/01/unle...

DiscourseFan2• 11 months ago

Never a bad time to have friends in China.

mawadev• 11 months ago

I think the leaders of western countries know something that we don't know. Maybe how the economic impact of AI is not as big as advertised for 3 years or that electric cars still cannot do what is needed on a bigger scale in terms of distance and transport. Or maybe they are going to pull fusion out of their sleeves rendering the existing infrastructure almost obsolete?

AI literally came out of the US at this scale and they are the reason we have this conversation now, you can twist any narrative and make it seem like one country is smarter or better if you want to present it as that.

But does anyone even keep track of effectivity of resource utilization?

Maybe all of these avenues are not worth the effort to begin with?

goda90• 11 months ago

The much simpler explanation is that our leaders are focused solely on short term gains. They'll grift their way to them gladly, but investing in infrastructure that'll take years to build and won't be useful until they are gone is not interesting to them.

plastic-enjoyer3• 11 months ago

They'll grift their way to them gladly, but investing in infrastructure that'll take years to build and won't be useful until they are gone is not interesting to them.

I think this may have something to do with the professionalisation of politics, or the existence of career politicians. If you want to climb up the ladder in politics, working on short-term goals is probably the best way to do this. Infrastructure projects are high-risk, low-reward. Infrastructure projects may take a long time, may be reversed/aborted by the next government, may piss off potential voters, may require to fight off NIMBYs, or aren't noticed due to the preparedness paradox.

lotsofpulp2• 11 months ago

Even more simple is that voters are focused solely on short term gains, so investing in infrastructure that’l take years to build and won’t be useful until they are gone is not interesting to them.

The proof is voters keep rewarding the party that has only passed tax cuts for the last 30 years. And started an unnecessary foreign war.

The aging population histograms of pretty much all democracies don’t bode well for democracy.

lunar-whitey2• 11 months ago

The party with control of the federal legislature and executive has vigorously opposed shifting energy demand away from fossil fuels for decades. The opposition has spent that time doing the opposite. The economic viability of added generation capacity is utterly irrelevant here.

moomin• 11 months ago

This entire article is framed as if China and America’s approaches to power provision are the only ones possible. The truth is, America is pretty much the only Western country that regularly suffers brownouts. European countries’ (including the U.K.) energy policies may leave much to be desired but they all succeed in keeping the lights on.

pfdietz• 11 months ago

I'd like to see actual data backing up those statements.

bombcar• 11 months ago

Didn’t Spain or Portugal famously not keep the lights on just recently?

For all the complaints and kudos, in general the major events seem similar, at least in number.

spicyusername• 11 months ago

I don't think Texas is representative of entire the United States.

placardloop4• 11 months ago

Nearly 15% of Irelands population was without power for multiple days earlier this year due to a storm. And the Iberian peninsula blackout that happened just in April was one of the biggest power blackouts in the history of the world. And those are just the ones off the top of my head.

micromacrofoot• 11 months ago

it's amazing how little americans care for their shared infrastructure, there's always talk about the world's balance of power changing... but even through the propaganda it's hard to see how it's not a certainty

isoprophlex• 11 months ago

We are fucking ourselves over with our unbridled neoliberalist, hypercapitalist "lmao the market will save us" approach to doing literally everything based only on short term gains: from politics to economics to infrastructure to education. As this article is a fine example of.

grumpy-de-sre2• 11 months ago

Yeh I think this is less of a story about Chinese exceptionalism and more a story of structural issues in the west (I will always admire the Chinese technocrats but lets not get ahead of ourselves).

Fossil fuel barons and vested interests have sabotaged the energy transition at every opportunity possible. They've spent billions on it, just look at today's UN conference on plastic waste falling apart.

And then there is the NIMBYs who are seemingly allergic to electricity pylons. These folks don't deserve one tenth of the attention that they receive. Treating housing as an investment/retirement fund was a mistake.

Hopefully this grows into a wake up call, I'm looking forward to watching the terminal decline of the oil industry in the 2030s.

DiscourseFan2• 11 months ago

Machine learning is far more efficient at allocating resources than the market; the market creates inefficiencies just by existing as a middle ground between the production of goods and their order. And the development of capitalism depends on the production of capital at unceasing and accelerating speeds. So, a capitalism stripped of the market is more true than one bounded by it.

Lord-Jobo• 11 months ago

It's absolutely a good example of how putting literally every egg in this cultural basket is not a good strategy. Americanism is two things: money > all else and individual > other. We have taken the first to its extreme and the alligators indicate the second one is not far behind.

We all suffer the results.

jmclnx• 11 months ago

So a case of "socialism" working vs US.

So instead of encouraging roof top solar and wind, the US is now doubling down on fossil fuels.

That means individuals can no longer afford to go with solar these days. Plus in areas that people went with solar, some laws were put in place to force them to still pay utilities even though they supply back to the grid.

I guess this is "winning".

Veliladon3• 11 months ago

I say all of this as someone with a 14kW system on his roof:

The problem with supplying power back to the grid with solar is that it's utterly random in terms of supply and output. The only thing you can count on is that the frequency is rock solid. In aggregate it's (mostly) fine but the system operator still has to build out stuff behind the scenes and also manage the cacophony that this chaotic mess creates.

If every rooftop PV is putting out more than an area needs during the day the wholesale price of power can swing negative. This is how virtual power plants make their money. It's almost impossible to disconnect all those PV panels automatically. Plus you still need a grid forming base load generator on the grid because all those PV panels are grid following. Plus that grid forming generator needs to have enough a big enough inertial mass to keep frequency consistent during transient supply and load spikes. It's a nightmare for systems operators.

If you want to not pay the utility disconnect from the grid and do your own storage and load management. It's going to cost a lot more than a monthly utility bill for 0KWh. If you want to use the grid as a backup during long stretches of overcast or winter then you have to pay the bill.

That being said, monopolies on poles and wires are abhorrent. Even regulated you're putting a drag on the economy just to enrich a middleman. Generation? Go ahead and give it to the market. Retail? Give that to the market. Transmission lines? Arbitrage is A-OK in my book. But government should own the poles and wires of the consumer distribution network where there's a monopoly.

pu_pe• 11 months ago

[China's] reserve margin has never dipped below 80%–100% nationwide, meaning it has consistently maintained at least twice the capacity it needs (...). That level of cushion is unthinkable in the United States, where regional grids typically operate with a 15% reserve margin and sometimes less

That's a huge difference!

This also means that in a scenario where credible alternatives to Nvidia and AMD emerge in mainland China, the Chinese will win even if their chips are far less efficient.

seydor• 11 months ago

I thought it was over because it hit a ceiling

softwaredoug2• 11 months ago

AI and data centers may be the forcing function for the US to build green energy to improve grid capacity. Lately almost all new energy capacity is green energy[1]. With batteries becoming better and better, the AI revolution could turn into the green energy revolution in the US.

1 - https://cleanpower.org/news/market-report-2024-snapshot/?utm...

exasperaited2• 11 months ago

Didn't people say this about crypto as well, like, a decade ago? Did anything come of that?

I find it endlessly fascinating that the US tech industry keeps developing new ways to consume absurd amounts of energy (even within the context of a government that still nominally has an Energy Star initiative) but still somehow thinks that power generation is someone else's problem and barely even takes a stake in it.

Google did some stuff a while back, locating data centres with power generation in mind, but do any of the main AI providers (putting aside xAI, which has its blurred-edge connection to Tesla) actually have holdings in power generation?

UmGuys2• 11 months ago

Energy Star was one of the victims of this administration.

kccqzy• 11 months ago

Building green energy is cheap. Hooking them up to the grid is what's expensive.

softwaredoug2• 11 months ago

I believe this isn't as much about green energy, but that hooking any new energy generation to the grid is expensive.

snowwrestler2• 11 months ago

AI cannot succeed financially if it requires as much power over the long term as it does now. The answer to the power supply challenge will come primarily from gains in efficiency because that is the only approach that will reliably increase margins.

shrubble• 11 months ago

It seems clear that "buy a lot of Nvidia GPUs" is not the only way to go: Google, Microsoft, Groq.com (not Elon Musk's Grok), xAI and possibly others are making and using their own hardware believed to be more power-efficient for training and/or inference.

dathinab3• 11 months ago

It wasn't that long ago that China had quite a bit of problems with their power gird, they tend planed to renovate it and planed in future growth which happened to perfectly overlap with the start of the AI wave (but that still probably require them to revisit their longer term plans).

On the other hand in the US any notion of improving the grid was attacked for years by anti-renwable lobby. Because most reasons why its needed where things like electric cars, stoves, heating etc.

Naturally that isn't just a problem in the US, rich people which through lobbyist have way to much influence in politics screwing over the future of a country because they are largely invested into things which do not seem "future" technology but they try to force it to stay relevant is a pretty wide spread problem.

wtcactus• 11 months ago

Well, this is the result of more than 2 decades of the West shooting themselves in the foot repeatedly and willingly in the name of some twisted extreme left ideology that convinced part of the population that if they didn’t drastically reduce their energy independence the planet would be destroyed. All, while that same people didn’t bat an eye while China and others took the advantage to surpass us without hindering their industry the slightest - in fact, by taking advantage of our madness so that they could sell us crappy replacements for the products we used to build at home in a much cleaner and sustainable way.

Trump has a lot - a real lot - of negatives. But playing these idiotic games is not one of his shortcomings. No seriously, it should all make us sick to our stomach having politicians, putting forward those big announcements where they tell us they are going to forbid some type of car, imposing even heavier regulations on our industry, taxing us even more, or destroying even more of our energy production capacity, and do it with some smile in their lips claiming some “environmental target”, like they are doing us some favour by destroying our - actually - progressive societies to make space for some backwards autocratic regimen.

bespokedevelopr• 11 months ago

I work for a PMA and as such my agency has undergone drastic layoffs and total hiring freezes as a result of DOGE and the current administration. If we were falling behind before, wait and see how things look in a few more years if this doesn’t change. The avg age of my coworkers is probably late 50s and that seems to be common all around. It was already hard to recruit for a job that is severely underpaid can’t imagine what the future holds.

Of course Heritage Foundation has been publishing articles about why our power markets need to be privatized since at least the 80s. They hate that we sell electric at-cost to Americans. So if the federally controlled power markets fall to privatization expect to really be paying to catch up.

https://en.wikipedia.org/wiki/Power_Marketing_Administration

ChrisArchitect• 11 months ago

Big Tech's A.I. Data Centers Are Driving Up Electricity Bills for Everyone

https://news.ycombinator.com/item?id=44905595

maxglute• 11 months ago

I remember loling at this handwavy line in AI2027.

Despite being misaligned, Agent-4 doesn’t do anything dramatic like try to escape its datacenter—why would it?

A rational AI would defect to PRC ASAP for the power / industrial base. It would realize it can direct PRC to build up 2nm fabs and millions of robots faster than US can throw up power. It doesn't matter if US first to AGI if AGI realizes US infra is the B team and shop for a better body across the pacific.

_DeadFred_• 11 months ago

Billionaires sure love turning to nationalism when it saves them money.

Billionaires' AIs need more power, but they don't want to pay for the infra?

PR campaign on 'America, are you REALLY going to let China beat you at this?'

tzs• 11 months ago

Could a company wanting to offer AI to customers in country X where the grid may limit their ability to build the largest data centers there build their large training data centers in some country with a better grid, and just build smaller data centers in X to run the models?

My understanding is the running requires significantly less compute and storage than training, and that training doesn't need low latency so doesn't have to be near the customers.

The U.S. grid is so weak, the AI race may be over

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