Clean energy will be essential to win AI career with China

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The writer, a former U.S. Treasury Secretary, presides over the Paulson Institute

One of the most urgent and less appreciated energy challenges in the United States is the artificial intelligence race with China. America is at the helm, but Beijing invests a lot to close the gap. Washington’s question is: The United States can keep it forward without a national energy strategy to feed it?

The energy landscape has changed dramatically in recent years. Russia’s invasion of Ukraine remodeled it during the night. The prices increased and the governments went back to reduce the confidence in Russian gas. Energy safety became paramount. As Europe and other regions that are not energy independent seek to approach these vulnerabilities, they are increasingly seeking solar and wind to reduce the dependence on fossil fuel.

China is moving forward, combining long-term industrial strategy with a massive investment in both AI infrastructure and energy to support it. Your data center market is expected to grow almost $275bn Between 2025 and 2029. It invested more in renewable in 2024 than the United States, the EU and the United Kingdom. Beijing’s clear ambition is to master the technologies of the future, understanding that energy policy will be key.

In the United States, in the United States, as AI models become more complex and they unfold on a large scale, and the power of the cloud grows, electricity demand increases faster than public services. Some data centers now consume as much power as medium -sized cities. In Virginia, they consumed approximately one fourth of the state’s electric charge by 2023. This has increased the concern over the systems of the system and the highest residential invoices, leading to new and effective regulations moratorium about the creation of data centers in the State.

The United States must develop and unfold a national energy strategy of clear eyes that prioritizes speed, flexibility and profitability. Since electricity demand substantially exceeds supply, it makes sense to think of clean electricity as an “addition” to existing energy supplies. In fact, almost all additional electricity in the United States last year came from solar and wind sources: traditional energy sources cannot meet the need.

Gas cannot fill the vacuum in short or medium due to the shortage of turbines. Coal will not solve the problem because the usual utilities cannot be reduced quickly enough to meet urgent needs (and air pollution harms health). The expansion of nuclear energy is an essential part of the solution, but the United States is far behind and China is very forward in developing avant -garde nuclear energy.

Given the abundance of natural gas in America, many data centers will still rely on it, but smarter and faster are faster models emerging. For example, a hybrid model that uses solar storage and battery or a maximum gas background in high -demand periods is faster to climb, due to the order order and assembly driving times, air permits and interconnection. They also require less early investments and “comprehensive costs” are comparable to basic gas.

This model is not without risk. A short -term shock for solar or storage ecosystems would leave a large hole in the same way as the power needs of AI increase. Without existing solar incentives, which have led to a significant meaning in creating a playing ground with China and, with the United States Administration’s tariff regime, will increase the comprehensive costs of the hybrid model. But hooking with gas would be to sacrifice the speed of development and bet on the rapid decrease in solar and battery storage costs, which fell about 20 percent last year and more than 80 percent over the last decade.

The right answer is not to choose a source of energy on another, but to create, quickly, the conditions for extending what works. This means that the low tax regulation environment that allowed the United States renewable energy boom during the first Trump administration. We should also exemplary technologies such as long -term batteries of import rates, while doubling support for US -based solutions on utility storage. As for how utilities recuperate Costs, we must encourage investment in technologies that reduce energy prices for all.

AI is one of the main engines of demand for electricity. But it also has the potential of unlocking substantial profit gains. We cannot afford to lose this moment. There is more capacity, lower costs and higher energy safety.

The United States has still built an advantage in energy independence. The test is whether we can meet the energy needs of the next era of innovation. If so, we will be in a stronger position in and that any other nation over the next decades.