By Simon Watkins - Sep 22, 2026

• China’s AI industry enjoys a major power-cost advantage, with Chinese models reportedly delivering near-U.S. performance at a fraction of the cost, helped by a more integrated and efficient electricity grid.
• America’s AI boom faces a growing power bottleneck, as data-center demand surges while grid constraints, lengthy nuclear development and shortages of gas turbines make rapid capacity expansion difficult.
• High costs, heavy borrowing and private-credit exposure could trigger bankruptcies and a broader technology-sector selloff.

The current focus of the world’s governments, business and media when it comes to artificial intelligence (AI) is on the dangers it poses to jobs, democracy and even the future of humanity itself. For many of a certain generation, these fears crystallise in the cold but relentlessly courteous voice of HAL, the on?board AI in Stanley Kubrick’s 2001: A Space Odyssey. After a crew member questions HAL’s diagnosis of a faulty antenna, the system secretly lip?reads the astronauts, discovers their plan to disconnect it, and kills them one by one. Nobody who sees the film is likely to forget the chilling reply from HAL to last surviving crewman Dave Bowman’s order to “open the pod bay doors” so he can re-enter the spacecraft after being locked outside by HAL during a spacewalk: “I’m sorry, Dave. I’m afraid I can’t do that.” As it stands, though, potentially far more chilling for U.S. AI firms is the huge structural disadvantage that they have compared to their Chinese counterparts and the massive drop in their companies’ stock market valuations that this may soon catalyse.

“The key problem here is that the major Chinese AI players currently achieve around 90% of the performance of their U.S. competitors but at only about 10% of the cost,” Mehrdad Emadi, head of risk analysis and energy derivatives markets consultancy Betamatrix, in London, exclusively told OilPrice.com last week.

More:

Is China’s Secret Power Advantage About To Trigger An 89% Crash In US AI Stocks | OilPrice.com