Elon Musk: U.S. could soon be producing more chips than we can turn on, a problem China doesn’t have

Elon Musk, in a conversation with BlackRock CEO Larry Fink at Davos, warned that insufficient electrical power is the primary limiting factor for AI deployment in the United States, suggesting the country will soon produce more AI chips than it can power. This issue stems from decades of underinvestment in the U.S.'s outdated electrical grid, impacting the efficiency of AI data centers, such as two massive Nvidia facilities in Santa Clara, California, which may remain unpowered for years. Musk contrasted the U.S. situation with China, which he noted has rapidly expanded its production capacity by relying heavily on solar power. He also mentioned that Tesla has turned to Chinese suppliers for solar panels to expand U.S. solar capacity, despite high U.S. tariffs on Asian solar equipment. The Trump administration, along with 13 bipartisan governors, previously pressured PJM Interconnection, a major grid operator, to increase power supply and proposed auctions for tech firms to build power plants. President Donald Trump also encouraged tech companies to build their own nuclear plants, promising quick approvals. However, the Trump administration also opposed a pivot to solar energy, citing concerns about grid compromise and imposing tariffs that, according to a National Bureau of Economic Research paper, increased energy costs and slowed solar adoption in the U.S.