Artificial Intelligence (AI) development is reshaping the geopolitical landscape. While the focus in the US-China tech war has been on chips and lithographic machines, experts point out that another key factor constraining AI development may be nuclear energy, making nuclear energy a focus in the US-China tech war.
Founder of the US AI company Scale AI, Alexandr Wang, once stated that besides chip quality and production, another key indicator of the AI ecosystem in China and the US is electricity. According to him, in the mid to long-term view, the real bottleneck for AI is electricity rather than the actual chips.
A report released by BloombergNEF in April showed that by 2035, the electricity consumption of US data centers is expected to account for about 9% of the total electricity consumption, more than double that of 2024.
According to Wood Mackenzie’s latest Energy Transition Outlook, global data center electricity demand is expected to reach 700 terawatt hours (TWh) by 2025, and increase to 3500 TWh by 2050, equivalent to the current power demand of India and the Middle East combined.
Wood Mackenzie predicts that due to the growth in electricity demand driven by data centers, nuclear power generation in the US is expected to increase by 27% after 2035.
Currently, from Microsoft to Google under Alphabet, more and more tech giants are signing power purchase agreements with nuclear energy startups to ensure future power supply.
Yeh Tsung-huang, former director of the Institute of Nuclear Science at National Tsing Hua University in Taiwan, told Epoch Times that the demand for electricity in the AI industry will be much higher than traditional industries. Providing sufficient electricity is a prerequisite for any region looking to introduce AI technology or attract investments from large tech companies. While the chips themselves are not a major issue, ensuring that AI data processing centers can operate normally, electricity is indeed the biggest key factor.
Soo Chi-yun, director of the Strategic and Resource Division at the Taiwan Institute for National Defense and Security, told Epoch Times that with current computational power, asking AI a question could consume about 60 watts of electricity. Drawing a picture with AI would consume even more power, making electricity a critical need for the future of AI.
If chip performance improves, its energy consumption will decrease, making it more energy-efficient. However, as the overall demand increases due to the proliferation of AI applications, the energy supply for the AI industry will need to increase.
The United States has been a pioneer in nuclear energy development, but due to the economic attractiveness of natural gas power generation over the years, nuclear power plant construction has often been delayed. Currently, the average age of nuclear power plants in the US has exceeded 40 years.
In the 2010s, Beijing led the growth of the nuclear power industry, with 10 nuclear reactors connected to the grid in 2015. Meanwhile, the nuclear industry in Europe and the US faced many challenges. In 2017, the US manufacturer of the AP1000 reactor, Westinghouse Electric Company, filed for bankruptcy protection, leading to the cancellation of two AP1000 reactor projects under construction.
According to a US bank, at the current pace, China’s nuclear power plant capacity may exceed that of the US by 2030.
According to official statements from the Chinese Communist Party (CCP), mainland China is aggressively developing nuclear power primarily for emission reduction, but this claim is being questioned.
Yeh Tsung-huang stated that achieving net zero carbon emissions may not be the top priority for the mainland. A more practical consideration is that it aims to meet the nation’s electricity demand, while also vigorously developing the semiconductor industry and AI data processing centers. This is the most important factor for accelerating the development of the nuclear energy industry.
Soo Chi-yun stated that the reason behind the CCP’s vigorous promotion of nuclear power plants is publicly stated as meeting carbon reduction needs, but covertly, it aims to develop nuclear capabilities. After purifying nuclear power plant waste materials, they can be converted into nuclear raw materials, making it a dual-purpose strategy for the CCP. By promoting nuclear power plant development during peacetime and then refining the nuclear materials for weapons to increase nuclear warheads, this is the CCP’s strategy.
To promote nuclear energy development, President Trump issued four executive orders to initiate nuclear energy investments in May, and in July, released the “2025 AI Action Plan” emphasizing the development of AI infrastructure. The US Nuclear Regulatory Commission (NRC) has reduced the approval period for nuclear power plant licenses from several years to 18 months under President Trump’s executive orders, and plans to initiate construction on 10 large reactors before 2030.
Soo Chi-yun mentioned that prior to the Trump administration, the US focused on technology development rather than commercial operation of nuclear power plants domestically. Beijing is actively promoting commercial operation of nuclear power, with South Korea also pushing for commercial nuclear power. The US is currently facing issues with cost and scale.
“However, with the US’s strengths in technology development and under the guidance of the Trump administration restarting nuclear energy, the US is likely to rapidly advance. Especially with current expansion proposals put forward by individuals like Bill Gates, including plans for small modular reactors and microreactors before commercial fusion, with increased rigid demand, the US may see rapid development,” Soo Chi-yun added.
Yeh Tsung-huang stated that due to strong government support, mainland China has invested considerable manpower and funds in nuclear power development, with about three to four unit orders placed annually. On the other hand, the US nuclear sector has stagnated for 20 years, with little promotion of third-generation nuclear technologies.
Yeh Tsung-huang expressed hopes that the nuclear energy industry in the US can restore its former glory under President Trump, by not only promoting third-generation nuclear energy systems but also enhancing their construction and promotion. He also emphasized the importance of accelerating the development of emerging nuclear energy industries, including Small Modular Reactors (SMR) and Micro Modular Reactors (MMR). He believed that with the proactive nuclear energy policies under the Trump administration, the US nuclear industry has the opportunity for accelerated development in the future.
As countries race to find new energy sources to meet the growing demand of data centers, interest in Small Modular Reactors (SMRs) and nuclear fusion is also growing.
SMRs are considered cheaper, quicker to build, and can be co-located with data centers without the need for additional power infrastructure. The first batch of SMRs is expected to be operational by 2030.
So far, tech companies have planned to invest in over 20 gigawatts of SMR projects, and the successful development of this technology could bring even greater opportunities.
Yeh Tsung-huang noted that the SMR technology in Europe and the US is indeed more advanced than in mainland China. While the mainland is just starting out, the US has been developing it for over forty years.
The nuclear power technology of the CCP is not indigenous but rather imported from the West.
Yeh Tsung-huang told Epoch Times that the mainland’s nuclear power technology actually originated from France. When the mainland began developing nuclear power, France was its first partner. During negotiations with France, they specifically mentioned technology transfer. France also complied with the contract by fulfilling the necessary technology transfer. Therefore, the mainland’s nuclear power plants today, including their self-designed Hualong One, are based on technology transferred from France.
The mainland today is essentially using existing technologies to downsize and develop SMR, which poses a greater challenge for them. They have a model of SMR called Ling Long One, and the timing of its commercial operation and its subsequent benefits still need further observation.
Yeh Tsung-huang stated that although the US is technologically ahead, there may be an issue with nuclear fuel. SMRs and MMRs require highly enriched nuclear fuel, which needs to be purchased from Russia. Now the US, unwilling to rely on Russian high-grade nuclear fuel, has begun producing its own, essentially starting from scratch. The US government has decided to actively invest and has designated several fuel companies to undertake this endeavor.
For a long time, nuclear fusion has been seen as the ultimate goal in seeking clean and abundant energy.
The energy released from nuclear fusion is four million times that of coal and four times that of nuclear fission, with no greenhouse gases or long-term radioactive waste.
In December 2022, scientists at Lawrence Livermore National Laboratory in California focused the world’s most powerful laser on a pepper-sized diamond capsule filled with hydrogen gas, releasing 2.05 megajoules of energy as the laser ignited a fusion reaction converting hydrogen into helium. This breakthrough suggested that the core physical mechanism of controlled fusion has been cracked, potentially creating the possibility for producing cheap, carbon-free electricity.
However, even the most optimistic experts estimate that it will take around a decade before the first fusion power plant capable of delivering electricity to the grid can be built. Most believe it could take another two to three decades.
Given the outlook for nuclear fusion, this is also becoming a focal point in the US-China tech competition.
Microsoft co-founder Bill Gates remarked that in the race to develop the next generation of nuclear reactors, Beijing is increasingly challenging the US and other countries. He added that Beijing’s investment in fusion research is “twice that of all other countries combined.”
Andrew Holland, Executive Director of the Fusion Industry Association, warned that “if the US does not lead in fusion energy, China will take over, especially in an era of increased demand for AI and energy.”
Soo Chi-yun stated that current nuclear energy relies on nuclear fission, causing issues with nuclear waste disposal. While nuclear energy may seem inexpensive in the short term, the long-term costs can be high when considering plant construction and subsequent nuclear waste storage, raising the overall cost of nuclear energy use.
“Nuclear fusion, on the other hand, completely eliminates these issues,” he said, referring to fusion as an artificial sun due to it being based on fusion principles.
Soo Chi-yun indicated that currently there are experimental fusion facilities in the EU, with China also participating, and the US making progress in the field. Besides AI, nuclear fusion is proving to be another focus in the US-China competition. Before fusion can be utilized, both sides are competing over existing nuclear power plants, striving to enhance their efficiency and reduce risks. Currently, the US seems to have a technological advantage.
Advanced nuclear energy has also become a part of the geopolitical rivalry between the US and China. In June this year, amid the US-China rare earths war, the US Department of Commerce reportedly halted approvals on exporting nuclear equipment to mainland Chinese nuclear power plants.
Yeh Tsung-huang explained that the mainland China has already purchased the latest third-generation AP1000 reactors from Westinghouse, which have been imported and are generating electricity.
He mentioned that China is actively developing nuclear power domestically and is also marketing nuclear power technology to other countries. However, due to the global political climate, its push to sell nuclear products to free-world countries hasn’t been smooth. Only a limited number of countries have accepted their products, with the US and France sure to intervene. After all, the purchase of US-designed nuclear plants is favored by more countries worldwide. As US production capacity is currently limited, when the industry matures and resources are available by 2030, the opportunity to promote nuclear technology to the world will be significant.
Yeh Tsung-huang stated that the Beijing government has almost poured all its resources into the energy sector, particularly nuclear energy. Their shortfall is not in funds but in experienced technical personnel. Therefore, they cooperate with foreign universities and hire a large number of foreign consultants. Some Taiwanese have become consultants on the mainland.
However, those who have moved from Taiwan to the mainland for this purpose do not have access to key technologies. There have been reports in the media that the US did transfer technologies to the mainland through mainland-born scholars and experts established in the US. The US has since become vigilant about this and has taken measures to prevent it. Consequently, mainland experts are unable to attend academic conferences held in the US, as the threshold has been set by the US.