Public Enemy No.1 China dependent on AI? Hormuz closure gives US a leg up

The more reliant a country becomes on artificial intelligence, the more vulnerable it may be. In the case of China, that definitely looks like it could be the case. From BNPParibas:

In the AI supply chain, China accounts for 21% of the total "AI-related goods" exported worldwide and controls the supply of critical materials. On the domestic front, AI development and widespread deployment across the country should boost productivity gains and foster growth.

Thanks to its highly developed digital infrastructure, its own LLM models and its education system, the country is well-positioned to adopt AI. China therefore has the strategy, infrastructure, energy resources, critical materials and capital to pursue the development of AI in the next five years.

AI is energy and water dependent

AI is energy and water dependent. The vast amount required by data centers can be troublesome, stealing both, as well as arable land, from regional residents to fuel data farms.

At the moment, there is a major conflict with Iran, China’s major supplier for oil, and that, at discount prices. However, the Straight of Hormuz is closed to ships transporting Iranian oil, and that’s putting China in a bind. How much of one isn’t yet known.

China has coal-fired power currently providing close to 1200 GW, with more plants under construction. It also has nuclear and hydro power in operation picking up 445 GW combined. The country is doing its best to expand the transmission grid, but it still isn’t to capacity to handle what’s coming with AI.

Being set to supply data center power primarily with coal doesn’t help China when it comes to the basic need for oil. First, the obvious: coal plants require oil for start-up, maintenance, lubrication, even fire control to keep flames alive when burning low quality coal.

AI may be the brains for manufacturing but it goes nowhere without the essential material used in its products. China must export its goods, but where are those goods if there’s no oil for plastics, petro-chemicals, fibers, operating machinery – including power generating plants mentioned above – asphalt for road maintenance, and the ever-necessary lubricants? Transportation of all those goods can’t be overlooked. It’s the lifeblood of manufacturing and AI can’t physically move components or product.

China, which is driving the terror connection worldwide in its quest for dominance, must have oil to survive

There is a danger to setting sights specifically on AI development. It can only occur to the detriment of delivering other products imperative to manufacturing what AI may design and implement. Those factories and transport need oil in every form.

AI is not the be all and end all that tech oligarchs preach. They’re selling a bill of goods that may take over intellectual application but can’t provide for its own operational needs.

As long as China is manufacturing dependent for income, oil can’t be replaced by AI powered by coal, hydro, nuclear, or renewables that are completely useless, consuming more oil that the energy they produce. Everything in this information age must have oil to work. And China, which is driving the terror connection worldwide in its quest for dominance, must have oil to survive.

President Trump has had the foresight to put the USA on an energy independent course that is capable of sustaining America’s economic and manufacturing sectors, domestically and for export. By being self-reliant, developing oil production that can outpace all other nations, we have a leg up.

Note: The foregoing doesn’t address the exponentially growing threat of AI to humanity, that it's reaching a point of being beyond the grasp of developers’ and tech oligarchs’ control.

Check this article – “We’ve been warned”