[By Guancha Observer Network, Xiong Chaoyi] On May 20th local time, American billionaire Elon Musk told CNBC in an interview that with the technology industry building larger and larger data centers, the development of artificial intelligence (AI) may encounter power generation problems by the middle of next year.

He revealed that his AI startup xAI is planning to build a gigawatt-scale facility in Memphis, Tennessee. This facility will be completed within 6 to 9 months. According to U.S. Department of Energy data, 1 gigawatt of power capacity is equivalent to the power generation scale of an average U.S. nuclear power plant.

Musk also said that China is building far more power generation than the United States. "China's power generation looks like a rocket entering orbit, while America's power generation remains stagnant," the Tesla CEO said.

Elon Musk interviews with CNBC Video screenshot

In February this year, Google's parent company Alphabet warned that the U.S. was facing a power capacity crisis in its competition with China for AI dominance. Caroline Golin, Google's global energy market development director, said that after realizing that renewable energy could cause grid instability, the company began exploring nuclear energy solutions because wind and solar power generation are entirely subject to weather conditions.

Golin candidly admitted at a nuclear energy conference held in New York in February that her company faces a harsh reality—the existing power system struggles to meet the energy consumption needs of Google's data centers in both the short and long term.

Now, when interviewed, Musk believes that AI faces three bottlenecks when scaling up: chips, transformers, and power generation. Transformers are used to reduce the voltage of electricity generated by power plants so computers can use it.

"Even if we solve the transformer shortage problem, we will still face fundamental power generation shortages," Musk told CNBC. "People will start to face challenges due to insufficient power generation capabilities by the middle or end of next year."

It was reported that Musk's xAI is using natural gas turbines to power its Megaton data center in Memphis. Environmentalists criticized xAI for allegedly violating the Clean Air Act by using gas turbines without emission reduction technology and without obtaining permits, breaching permit requirements for "major air pollution sources."

Transmission towers in California, CNBC

Dominion Energy, an American energy company located in northern Virginia and one of the world's largest data center markets, has seen concerns from the market about the tech industry potentially reducing spending due to economic recession risks. However, public utilities including Dominion Energy have informed investors on recent earnings calls that they have not seen any signs of a slowdown in data center demand.

However, Constellation Energy, the largest nuclear power station operator in the U.S., warned that although demand is strong, some power companies' forecasts are exaggerated because developers are simultaneously advancing data center projects in multiple regions.

"I must tell you, guys, I think the load is overestimated," Constellation Energy CEO Joe Dominguez said during the company's first-quarter earnings call this year: "We need to hit the brakes here."

Notably, to address the energy crisis brought about by AI, Chinese data center enterprises have begun constructing their own substations. According to a report by China Energy News last August, the total planned power supply capacity for Qinhuai Data Group's three major areas—Huaixian in Hebei, Lingzhou in Shanxi, and Nantong in Jiangsu—is 1585 megavolt-amperes. Currently, 10 substations have been put into operation, with a total power supply capacity of 1355 megavolt-amperes. Additionally, Chinese data center enterprises are seeking close cooperation with power companies to explore new cooperation models such as virtual power plants and demand-side response to ensure stable power supply.

This article is an exclusive contribution by Guancha Observer Network and cannot be reprinted without permission.

Source: https://www.toutiao.com/article/7506742187529044495/

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