AI is eating power. The world can’t feed it fast enough.
The rapid evolution from chatbots to reasoning machines has sent global demand for computing into overdrive. Data centers are expanding at breakneck speed, and chipmakers like Nvidia are scrambling to keep up.
“In just the last six months, demand for computing has gone up substantially,” Nvidia CEO Jensen Huang told CNBC, adding that it’s the question investors ask him most. Nvidia shares climbed 2% Wednesday as the company continues to anchor the world’s AI expansion.
China, meanwhile, is racing to outproduce the US, generating 10,000 terawatt hours of electricity in 2024 — an edge that could reshape the global balance of power in the AI era.
Huang called this moment “the beginning of a new buildout, a new industrial revolution,” driven by the convergence of intelligent machines and the energy required to fuel them.
The dawn of a new industrial revolution
The demand is not just because AI reasoning models require massive amounts of computing power but because their results are so spot-on, Huang said.
“The AIs are smart enough that everybody wants to use it,” he noted. “We now have two exponentials happening at the same time.”
Huang added that demand for Blackwell, Nvidia’s most advanced GPU, is very high. “I think we’re at the beginning of a new buildout, beginning of a new industrial revolution.”
Last month, Nvidia announced a $100 billion investment in OpenAI’s massive data center expansion. The deal secures OpenAI as a customer of Nvidia, and it will leverage the company’s most advanced chips as it plans to build 10 gigawatts of data centers.
The race to stay on top
Huang also stated that the US is “not far ahead” of China in the AI race and that the country needs a “nuanced strategy” to maintain its competitive edge. He noted that Beijing is moving much faster than the US in building out the power required to support AI.
While companies such as Nvidia with its Blackwell processor may give the US the edge in advanced chip designs, Chinese tech giant Huawei is upping the ante with plans to launch new computing systems for its Ascend chips as soon as next year.
All types of energy will be needed
To meet demand and protect consumers from rising electricity prices, it will be necessary for the AI industry to build new power generation off the electric grid, the CEO said. At some point in the future, data centers should be outfitted with natural gas and then potentially nuclear power, Huang said.
Earlier this year, Nvidia revealed that it had hit a record Q4 revenue of $39.3 billion, with Huang noting the “amazing” demand for Blackwell AI superchips.