March 2025
To win the AI race, the US needs an all-of-the-above energy strategy
About This Brief Written by Joseph Webster Senior Fellow Atlantic Council Global Energy Center March 2025
Introduction The United States faces a “Sputnik moment.”1 Chinese firm DeepSeek claims its artificial intelligence (AI) model has achieved near-parity with US models in terms of functionality—at lower cost and energy use.2 While many AI analysts are skeptical of some portions of DeepSeek’s claims, particularly surrounding cost nuances,3 or even its ability to lower energy consumption,4 virtually all acknowledge that DeepSeek has made a serious technical achievement.5 Even as firms across the chip making, energy, and technology sectors sort through the implications, DeepSeek’s technical breakthrough will intensify the US-China AI race, with significant economic and military stakes. Staying ahead will require the United States to tighten chip export controls, increase investment, train an AI-relevant workforce, and collaborate with allies and partners across Europe, the Indo-Pacific region, the Middle East, and elsewhere. Additionally, and while acknowledging uncertain AI-related energy demand,6 the United States must build substantial amounts of new electricity generation and transmission to win the AI competition with China. To ensure US AI leadership, the United States must harness all forms of energy, allow a level playing field, and remove red tape constraining the build-out of critical enablers, especially transmission lines and grid-enhancing technologies. A “some of the above” energy approach could force the United States to compromise on not only AI leadership but also affordable electricity and other economic priorities. Failing to obtain sufficient electricity from all sources would stymie the push for US manufacturing. Constraining US access to all forms of energy—a some of the above strategy—would force scarce natural gas molecules into the power market, constraining liquefied and pipeline natural gas exports and sending the US trade deficit even higher; raise domestic energy prices; and make US manufacturing less competitive.
The Atlantic Council Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to netzero emissions.
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The AI race with China carries high stakes. If the Chinese Communist Party can achieve global technological dominance via AI, it is unclear where or if General Secretary Xi Jinping’s ambitions will stop, given his deeply held belief in total ideological control.7 China’s leadership in AI would pose disasters for the world, not only because of Xi’s ideology but also the Chinese Community Party’s seemingly devil-may-care approach to technological risks8 and mismanagement of crises,9 including by failing to adequately warn the world of dangers as COVID-19 emerged. The competition with China in artificial intelligence may be the defining national security challenge of our time. To win this all-important race, the United States must mobilize its resources, including in energy.
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