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China leads the AI race as US struggles on energy, warns AI firm Anthropic
The company has urged Washington to cut down 'red tape' surrounding the power infrastructure development to stay competitive with China. Citing data from a February 2025 report by Australian think tank Climate Energy Finance, Anthropic stated that China, last year, added 400 gigawatts of power capacity, whereas the US only added 'several dozen', amounting to just one-tenth of China's total.
Anthropic, the firm that is behind the Claude large language models (LLM), noted that the artificial intelligence sector in the US would require at least 50 gigawatts of power capacity by 2028 to maintain its leadership in global AI. It further mentioned that the disparity with China in terms of power capacity was 'concerning'.
The report further added that while US President Donald Trump's Administration has already taken steps toward removing barriers by setting ambitious nuclear power targets and accelerating National Environmental Policy Act (NEPA) reviews, to compete with China, the US must take further action to address regulatory challenges that can delay energy projects.
As the world's two largest economies engage in a tech race — from advanced semiconductor technology to artificial intelligence algorithms — energy generation has emerged as a critical new frontier.
According to Matty Zhao, co-head of China equity research at Bank of America Securities, in an interview last month said that while the US capital expenditure on artificial intelligence was heavily focused on hardware like semiconductors, a significant chunk of China's artificial intelligence investments would go in building data centers, the energy infrastructure needed to support them.
Earlier in May, billionaire and Tesla chief Elon Musk warned that the US could face power capacity issues related to artificial intelligence development by 2026, CNBC reported.
The report comes at a time when China announced its plan to build a mega dam project in Tibet. With an estimated investment of about 1.2 trillion yuan ($167 billion) and an expected annual electricity generation capacity of 300,000 gigawatt-hours, the dam in Tibet would make it the world's largest hydropower facility.
According to a report in South China Morning Post, China, in 2024, accounted for 71 per cent of the global rise in hydro power generation, adding more wind and solar power than the rest of the world combined. However, the Anthropic report suggests that in comparison, the US 'is not on track to meet the energy needs of AI training or inference by 2028'. This, according to the report, is partly because of regulatory issues, including the construction permits and approvals needed to build transmission lines.
It further claimed, 'China – also vying for AI leadership – does not face the same set of regulatory constraints that we do. While China's infrastructure projects also required permits, regulators processed them far more quickly."
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