Jefferies’ ‘Greed & Fear’ Report Claims Global AI Race Will Be Won by the Country with Abundant, Cheap, and Continuous Energy Supply.
Artificial Intelligence (AI) has emerged as a defining force shaping global technology, economy, and geopolitics. Governments and tech giants worldwide are competing to gain the upper hand in this race. In its latest edition of the renowned “Greed & Fear” series, Jefferies makes a striking claim: the winner in the global AI race will be the nation with reliable, affordable, and uninterrupted energy. On this front, China appears to have overtaken the United States.
The AI Race Is No Longer Just About Technology—It’s About Energy Dominance
The report highlights that as AI models grow larger, their energy requirements rise exponentially. For cloud providers, chip costs and data center infrastructure are now secondary concerns compared to ensuring a continuous power supply. Top executives from Nvidia, Microsoft, and Amazon have acknowledged that the “compute glut” is no longer the primary problem; energy scarcity has become the biggest bottleneck for AI development.
In this context, the AI race has transformed from a technological competition to a battle over energy, with China emerging as the strongest contender.
Why China Is Ahead—Low-Cost Energy, Massive Subsidies, and Solar Capacity
Nvidia CEO Jensen Huang recently told the Financial Times in London, “China is poised to win the AI race because electricity is practically free there.”
Thanks to energy subsidies, Chinese companies can use alternative chip options while keeping overall operational costs far lower than in the U.S.
China’s advantage is reinforced by three critical factors:
1. Aggressive Solar and Battery Storage Expansion
In the first nine months of 2025, China added 240 GW of solar capacity, surpassing the total installed solar capacity of the United States (178 GW). Last year, China added 429 GW of new power capacity, with solar and wind generating 250 TWh of additional electricity, while total demand rose by just 170 TWh. This surplus gives China the ability to scale AI infrastructure rapidly.
2. Power Subsidies for Data Centers
Beijing has directed local governments to provide up to 50% electricity subsidies to data centers, provided they use domestic chips. This not only supports AI ecosystems but also promotes domestic technology self-reliance.
3. Energy-Driven Strategic Autonomy
Unlike the U.S., which is dependent on legacy technologies like LNG and nuclear, China prioritizes cost efficiency and energy independence over green narratives. This approach has allowed China to optimize its AI energy infrastructure without being constrained by ESG or climate policies.
Challenges for the United States—Aging Energy Systems and Constraints
While China leverages new battery-solar technologies to reduce energy costs, the U.S. faces energy limitations. Microsoft CEO Satya Nadella acknowledged that several data centers struggled due to insufficient power supply, causing chip stockpiles to remain underutilized. Similarly, Amazon CEO Andy Jassy noted that while capacity is increasing, energy scarcity remains the largest hurdle.
ESG and green politics in the U.S. have slowed aggressive renewable energy expansion, giving China a decisive advantage in AI infrastructure.
Will China Become the AI Superpower?
The report concludes that the AI race is no longer defined by GPUs, data, or algorithms alone—energy availability and cost will determine global leadership. Long-term technological superiority depends on the ability to train, deploy, and operate AI models continuously, requiring abundant, low-cost electricity.
On this measure, China not only leads but also poses a significant challenge for the U.S. to catch up. The future of AI supremacy will belong to countries that control energy supply, and currently, China is in a commanding position.
