Billionaire investor Chamath Palihapitiya has raised concerns about the potential threat to the United States’ AI dominance due to a lack of electricity to power data centers.
What Happened: On Monday, Palihapitiya took to X and shared a graph while expressing his concerns about the U.S. potentially losing its AI edge to China due to a lack of electricity to power data centers.
He pointed out that as AI becomes more reliant on computational power, it also becomes increasingly dependent on electricity to power the data centers housing the computations.
“The U.S. is still ahead in model sophistication and quality, but we are way behind on electricity generation, which could catch up with us,” he said.
Palihapitiya stressed the importance of prioritizing and incentivizing every aspect of the energy ecosystem—including generation, storage, transmission, and distribution—to tackle the growing challenge.
Why It Matters: The warning from Palihapitiya comes at a time when the energy consumption of AI data centers has been a growing concern. In April 2024, ARM Holdings plc (NASDAQ:ARM) CEO Rene Haas said that AI data centers could consume a quarter of the U.S. power by 2030, without improved energy efficiency.
Morgan Stanley (NYSE:MS) in March 2024 projected that power demand driven by generative AI will grow at an average annual rate of 70% through 2027, primarily due to the expansion of AI-reliant data centers.
Meanwhile, in April this year, Former Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) CEO Eric Schmidt warned that China's rapid increase in AI investment could allow it to surpass the U.S. unless Washington significantly steps up its efforts.
He also urged President Donald Trump to go beyond simply reversing previous administration policies and take stronger action.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
