Tesla cofounder to AI companies in US: I think we should be really worried about China

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Tesla co-founder JB Straubel has an energy warning for American artificial intelligence (AI) companies. Straubel, who left Tesla in 2019 to become the founder and CEO of battery recycling company Redwood Materials, said that US-based AI companies should be concerned about China's rapid expansion of power generation capacity.

The warning comes as the race to build AI infrastructure accelerates rapidly. He has also predicted that the growing electricity demand from data centres is exposing weaknesses in the US power grid and could affect the country's competitiveness in AI. He also noted that the country's energy infrastructure is struggling to keep pace with AI development.Speaking at Fortune's Brainstorm Tech conference in Aspen, Straubel said, “I think we should be really worried. I think the grid can’t handle it. The pace of growth and demand of energy is unprecedented.”His comments come as technology companies continue investing heavily in AI data centres, which require significant amounts of electricity.

Industry experts have warned that power constraints are already causing delays and cancellations of some projects across the US.

Tesla co-founder JB Straubel on how AI growth is putting pressure on the power grid

Straubel said electricity demand in the US is expected to rise sharply over the coming decades, increasing the need for both new power generation and energy storage solutions. Redwood Materials, which initially focused on recycling electric vehicle batteries, has expanded into battery energy storage systems for data centres and the broader electricity grid.

The company recently announced a partnership with General Motors to use recycled EV batteries to power GM facilities.Straubel argued that meeting future demand will require a combination of grid expansion and alternative energy solutions located closer to end users. He said, “It’s a period of renaissance for the energy industry.” He also warned that the consequences of inadequate power infrastructure extend beyond electricity shortages.“That’s a lack of competitiveness. If it’s not the US, that to me is a failure. We’ve lost our competitive edge,” Straubel added, referring to data centre projects that could move overseas if power is unavailable domestically.Straubel also highlighted the growing importance of battery storage, arguing that energy storage systems will be needed to support a mix of power sources ranging from fossil fuels and nuclear energy to renewable generation. According to him, the grid will require significantly more storage capacity than exists today to meet future demand from AI and other industries.