It is not just electricity prices that CN doesn't ask its citizens to subsidize AI, there is an order of differences in efficiency differences btw US and CN.
By contrast, China' s DeepSeek has proven that it can use far less computing power than the global average. Its LLM uses 10 to 40 times less energy than U.S. AI technology, which demonstrates significantly greater efficiency. Analysts have stated that, if DeepSeek' s claims are true, some AI queries may not require a data center at all and can even be pushed out to phones.
It doesnâ(TM)t end there. This would also have knock-on effects for data center cooling requirements. Data centers have required large amounts of additional energy for cooling hardware that may otherwise become overheated under large computing tasks. Using lower levels of computing power, as in China, means cooling requirements will decline.
Providing an even greater advantage for China over the United States is the fact that electricity costs in the U.S. are more than double those in China. Household electricity prices in the U.S. were $0.18 per kilowatt-hour in March 2024, while those in China were $0.08 per kilowatt hour for the same month. One reason for this is that Chinese electricity prices are regulated to maintain affordability, and both fossil fuel and renewable energy suppliers receive government subsidies. The United States provides subsidies to fossil fuel suppliers at one-third the level of China and to green energy suppliers at less than one-third the level of China.