- Elon Musk says China is poised to lead the world in AI compute.
- China's electricity advantage could give it an edge in scaling AI systems.
- China will also "figure out the chips," Musk said.
Elon Musk says China is on track to outpace every other country in the computing power needed to run AI.
The Tesla and SpaceX CEO said in an episode of the "Moonshots with Peter Diamandis" podcast published Tuesday that "China's going to have more power than anyone else and probably will have more chips."
"Based on current trends, China will far exceed the rest of the world in AI compute," he added.
Musk said China's decisive advantage in the AI race lies in its ability to scale electricity generation. He estimated that China could reach about three times the electricity output of the US by 2026, giving it the capacity to support energy-hungry AI data centers.
Electricity generation is the limiting factor to scaling AI systems, Musk said.
"People are underestimating the difficulty of bringing electricity online," he added.
While the US has focused on restricting China's access to advanced semiconductors, Musk suggested those constraints may matter less over time. China will "figure out the chips," he said.
Musk added that diminishing returns at the cutting edge of chip performance might make it easier for China to catch up, even without access to the most advanced designs.
Musk has previously pointed to China as a model in areas beyond AI infrastructure.
In an episode of the "People by WTF" podcast published in November, Musk said he wants to turn his social media platform X into "WeChat++," referencing China's dominant super app.
"I also like the idea of sort of having a unified app or website or whatever, where you can do anything you want there," he said. "China has this with WeChat."
AI's next bottleneck is power — and China is leading
Musk's comments come as energy supply and data infrastructure emerge as key constraints in scaling AI, rather than chips or algorithms.
Companies worldwide have rushed to build AI data centers, many of which require as much electrical power as small cities.
A report from Goldman Sachs in November said that an electricity shortage could slow US progress in the AI race.
"As AI demands massive power, a reliable and ample power supply is likely to be a key factor shaping this race, especially because power infrastructure bottlenecks can be slow to solve," wrote Goldman's analysts.
The report added that while pressure on the US power grid is increasing, China has been steadily expanding its energy capacity.
By 2030, China could have about 400 gigawatts of spare power capacity, according to Goldman. That's more than three times the total electricity demand data centers worldwide need.
"We expect China's spare capacity to remain sufficient to accommodate data center power demand growth while supporting demand in other industries," the analysts wrote.
In his annual New Year's address last week, Chinese leader Xi Jinping praised his country's progress in AI in 2025, saying China had "integrated science and technology deeply with industries, and made a stream of new innovations."
"Many large AI models have been competing in a race to the top, and breakthroughs have been achieved in the research and development of our own chips," he said in his speech in Beijing.
"All this has turned China into one of the economies with the fastest-growing innovation capabilities," he added.
