Tech magnates and energy leaders unite with Trump as he champions the advancement of artificial intelligence
## U.S. Pursues Aggressive Strategy to Lead AI Race Amidst Growing Competition with China
The United States has embarked on a multi-faceted strategy to solidify its position as a global leader in artificial intelligence (AI), with a focus on executive actions, infrastructure investments, and energy production. While the effectiveness of these measures is subject to debate, the U.S. has made significant strides in building its AI infrastructure, attracting investments, and fostering innovation.
In January 2021, President Donald Trump ordered his administration to develop an AI Action Plan to make America the world leader in AI and reduce regulatory barriers to its expansion. The plan, which includes input from the National Security Council, is due by July 23, with Trump set to mark the deadline with a major speech as part of an event titled "Winning the AI Race."
The U.S. has taken measures to bolster its AI infrastructure, boasting ten times more data centers than China and nearly four times more spending on AI servers. The Trump administration has emphasised infrastructure investments, such as energy production (coal, natural gas, nuclear), data centers, and power grid upgrades, as essential to winning the AI race. A prime example of this approach is a $15 billion data center in Pennsylvania, which is a flagship investment in the U.S.'s AI strategy.
U.S. leadership in AI is also driven by its innovation ecosystem, with the largest number of notable AI models and massive R&D spending, led by firms like Google, Meta, Microsoft, and OpenAI. The U.S. has a clear advantage in this area, but China's vibrant AI sector, comprising "Six Little Dragons" (Baidu, Alibaba, Tencent, Huawei, JD.com, and Xiaomi) and a plethora of startups, is rapidly closing the gap.
The U.S. and China are engaged in a technological arms race over AI dominance, with the Biden administration implementing sweeping export controls in October 2022, targeting foundational technologies including AI, aiming to “maintain as large a lead as possible” over China in critical technological domains. However, these controls appear to have galvanized China’s push for technological self-reliance, reducing Chinese firms’ dependence on American products and spurring a more aggressive national self-sufficiency campaign.
The race between countries to dominate AI is a concern due to the surge in power demand. U.S. power demand is hitting record highs this year due to the increase in AI and cloud computing data centers. Tech companies are working to secure enough electricity for their energy-guzzling data centers needed for AI expansion. Google, for example, secured a $3 billion electricity deal for its AI expansion, using U.S. hydropower.
In addition to executive actions and investments, the U.S. is also pursuing deeper AI cooperation with allies, such as South Korea, to build secure, resilient supply chains and maintain technological leadership, particularly in the Indo-Pacific region. The White House is considering executive actions to make it easier for power-generating projects to connect to the grid and provide federal land for data center construction. The administration is also considering streamlining permitting for data centers by creating a nationwide Clean Water Act permit. Approximately $90 billion in AI and energy investments have been made in Pennsylvania, with Blackstone's President Jon Gray announcing a $25 billion investment in data centers and energy infrastructure in the state, and CoreWeave announcing plans for a $6 billion AI data center.
The attempted restart of the Three Mile Island nuclear power plant in Pennsylvania between Constellation Energy and Microsoft is an example of unprecedented deals between the power industry and technology companies. The global race between countries to dominate AI is a complex and dynamic issue, with both the U.S. and China recognising that ample, reliable energy and access to critical minerals are essential for AI infrastructure. The race now hinges not only on technological prowess but also on the ability to integrate AI at scale across the economy, secure critical supply chains, and foster international alliances.
The U.S. administration has made strides in building its AI infrastructure, not only through executive actions but also by attracting significant investments from major technology companies such as Google, Meta, Microsoft, and OpenAI in the finance sector. The U.S.'s energy production, including coal, natural gas, nuclear, and renewable resources, plays a crucial role in powering AI servers and data centers. The competition between the U.S. and China extends beyond technological prowess to encompass the secure and resilient supply chains of critical minerals needed for AI and energy infrastructure.
