As China and the U.S. compete for domination in artificial intelligence, compute power will be the key factor in determining the winner, Bernstein found. The firm also named a few stocks to play on the trend. “China will need to make huge investments in semis and power infrastructure to catch up with the U.S., creating clear upside for related equities,” the analysts said It’s a step back from the market’s current focus on semiconductor access. The U.S. has restricted China’s ability to buy advanced chips for training AI models. Chinese companies have countered by using more, albeit less powerful chips, while launching AI models that are far cheaper to use than those of U.S. rivals. Just as chips are essential to the AI race, so is the electricity needed to power them. “Compute power depends not only on advanced semiconductors, but also on power supply to run hyperscalers, and here China is leading,” Bernstein’s Hong Kong-based analysts said in a March 17 report. By 2035, they predict the U.S. will use 511 zetta floating point operations per second, or ZFLOPS, of AI compute. That compares to the current level of 35 ZFLOPs, the report said, referring to a measure of computing speed. China only has 5 ZFLOPs of AI compute right now, but last year the country added more than 500 gigawatts of power …
