America's AI dominance depends on winning the 'power race' against China, energy expert warns
America’s ability to compete in the global artificial intelligence (AI) race may depend less on computing power and more on the energy required to sustain it.
"The AI race is definitely an energy race, and one of the things that we've said is that in order to win the AI race, you must win the power race," Nathan Lord, president of nonprofit organization Shale Crescent USA, told FOX Business. "But the only way you're going to win the power race is if you prioritize reliable fuel supply."
Electricity demand from data centers could account for as much as half of all new U.S. power consumption between now and 2030, according to the International Energy Agency (IEA).
Natural gas is projected to meet 60% of the power demand growth driven by AI and data centers, Goldman Sachs reported in April.
"Natural gas is the only fuel type that can be deployed fast enough, scaled large enough and still remain affordable for it to even become a viable option for data centers," Lord said.
For years, data centers have typically been built near fiber hubs, but Lord believes that needs to change.
"We've spent the last decade building where the fiber is and not where the power is located, and that's introducing a lot of issues," he said. "… What we're communicating to energy-intensive data centers is the safest, most reliable place for them to be located is on top of the natural gas supply, not build them 500 miles away or parts of the U.S. where there's no energy."
Roughly 80% of America’s natural gas supply comes from the Texas Gulf Coast and the Shale Crescent region — which includes Ohio, West Virginia, and Pennsylvania — where Shale Crescent USA works to support high-wage manufacturing, according to Lord.
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"The Shale Crescent region is uniquely equipped to be a solution for oncoming data center demand," he said.
Chevron is among the companies positioning themselves for this shift.
The company announced earlier this year it would work with Engine No. 1 and Chevron U.S.A. Inc. to create a new venture focused on developing natural-gas-powered energy solutions for data centers.
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Meanwhile, China has dramatically expanded its energy output. The country now produces 2.5 times more power than the U.S., despite surpassing America only 15 years ago, Lord said.
"America can't out-AI China if China out-powers us, so the U.S. must prioritize developing reliable power," he said.
