America Could End Up With Too Much Electricity
Until yesterday, there had been a growing consensus that AI servers farms would take up massive amounts of electricity. This would cripple America’s aging grid in some parts of the country. Electricity production would need to rise.
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To solve the problem, either utilities would need to add more capacity or large tech AI companies like Microsoft, Google, and OpenAI would need to build energy generation and their own local grids. The major issue is what fuel any of these solutions use.
The most desirable solution was to use renewables to drive the new energy. The current Administration has hampered the growth of wind power. That leaves solar and nuclear primarily. Nuclear plants could take years to come online. What is left? Coal, primarily.
AI Needs Less Power
The new Chinese AI software called DeepSeek appears to use much less powerful chips than US AI software. If so, the need for energy hungry chips, primarily from Nvidia, drops. The excess electricity generation which has already been financed to the tune hundreds of billions of dollars could end up as unused capacity.
If DeepSeek operates as it appears to, which is less expensive and requires less electricity, it would give renewables more time to be financed and built out. Alternatively, if the forecast electricity needs drop, there may be less and less room for renewables at all.
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