Why China Doesn't Need Nvidia Chips: It's Winning Without Them.

An exaFLOPS of AI computing power is 50% cheaper in China than America–thanks to lower energy prices and cheaper construction and infrastructure.

The overhyped showdown between the US and China for ‘AI supremacy’ (whatever that means), usually features cutting-edge chips like Nvidia’s H100 GPUs—the silicon brains powering models like ChatGPT. But as even China-hating tech investor Kyle Bass admits, “AI chip cost is a tiny portion of AIDC (AI data center) buildout cost.” America (whose entire advantage in chip innovation stems from ethnic Chinese!) won’t win if Washington ignores the bigger picture: the U.S. cannot compete with China on the cost of delivering exaFLOPS¹ of AI computing power.

AI data centers aren’t just warehouses of humming servers; they’re colossal engineering feats. A single hyperscale facility can cost $2 billion and span football fields, guzzling 100 MW, as much electricity as a small city. Chips make up only 10–20% of that tab—say, $100–200 million for a cluster delivering 100 EFLOPS. The rest?