Kevin O'Leary, a prominent investor, has issued a stark warning regarding the United States' capacity to meet the energy demands of the rapidly expanding artificial intelligence (AI) industry. He argues that the nation's energy infrastructure is critically underdeveloped compared to China's aggressive expansion, which could jeopardize America's leadership in AI. O'Leary also criticized existing tariff policies, attributing them to inflationary pressures and advocating for their elimination to reduce consumer expenses.
The chairman of O'Leary Ventures underscored the physical limitations of the U.S. power grid as the foremost obstacle to American AI supremacy. Despite the significant market optimism generated by AI tools across various sectors over the past two years, O'Leary emphasized that this growth is encountering a severe bottleneck: electricity supply. He starkly illustrated the disparity, noting China's addition of 500 gigawatts of power in the last 24 months, while the U.S. has added none.
O'Leary's concerns extend beyond the power grid to broader economic issues. He expressed a pessimistic view on immediate economic relief, suggesting that despite political pressure on the Federal Reserve, interest rate cuts are unlikely as long as Jerome Powell chairs the institution. Furthermore, he directly linked current tariff policies to the ongoing affordability crisis, asserting that imposing tariffs on goods not domestically produced inevitably leads to inflation. He urged policymakers to lift these taxes to provide financial relief to consumers.
In the end, O'Leary posits that the S&P 500's current record highs are primarily a result of AI-driven productivity, rather than an indication of a robust overall economy. He stressed that even the most efficient AI software becomes ineffective without the necessary hardware and, crucially, sufficient power to operate it. This perspective highlights a fundamental challenge that the U.S. must address to maintain its competitive edge in the global technology landscape.