AI Power Surge: China’s Energy Tech Stocks Rocket on Artificial Intelligence Growth Frenzy

Forget the old energy playbook. A new fusion is sparking rallies across Chinese markets—where kilowatts meet algorithms.

The AI Energy Nexus Ignites

It's not just about solar panels and wind turbines anymore. Investors are piling into companies positioned at the explosive intersection of power infrastructure and artificial intelligence. The thesis is simple: AI's ravenous appetite for computing power demands a next-generation grid. Firms developing smart storage, efficient transmission, and AI-optimized energy management are seeing their valuations recalibrate—upwards.

Beyond the Hype Cycle

This isn't speculative vaporware. Concrete projects are moving from whiteboard to reality. Think AI-driven grid-balancing systems that prevent blackouts, or predictive maintenance for massive renewable farms that cuts downtime. The narrative has shifted from 'clean energy' to 'intelligent energy,' and the market is chasing that signal with the urgency of a high-frequency trader.

The Cynical Take

Of course, every genuine innovation attracts a cloud of buzzword-chasing firms ready to slap an 'AI-powered' label on anything with a circuit board—a classic move for juicing valuations before the inevitable reality check.

The fuse is lit. Whether this surge powers a sustainable revolution or just another short-term bubble depends on who's building real solutions and who's just selling clever PowerPoints to eager capital.

Tracking profit surges across China’s power suppliers

Transformers, the backbone gear that keeps each data-center component fed the right amount of electricity, show the same pattern.

Zhao said Chinese companies earn 10–20% gross margins at home but pull 40–50% when selling into the US and Europe. “They WOULD rather continue to export and eat up the tariff,” she said.

AI power needs are exploding. The International Energy Agency expects data centers to consume 945 terawatt hours by 2030, up from about 415 terawatt hours last year. That’s more than a fifth of all electricity the US currently produces in a year.

Legacy grids aren’t built for this, and everyone knows it. So companies in the US are now turning to giant battery banks and micro grids, which run independently from traditional power networks. The US Department of Energy says micro grids are expanding fast and will soon make up a majority of America’s distributed energy resources.

US reliance on China is not slowing. Across the first nine months of this year, 60% of lithium-ion battery imports came from China, up from 43% in 2020. Those imports hit $15 billion through September, triple the full-year total from 2020.

This is happening even while Washington insists it wants to rely less on China. The Council on Foreign Relations warned in October that the biggest threat in the US-China AI race “stem[s] from supply chains.”

Raymond Yeung of ANZ doesn’t think there’s real separation happening. “China and the US have basically not decoupled. They’re a single economy of two different jurisdictions,” he said.

Yeung pointed to a “structural advantage” for Chinese groups in the AI supply chain, especially in lithium iron phosphate batteries. CATL leads that space, and Ho said demand remains strong because “there are just no other suppliers outside China.”

China’s speed and prices dominate global supply chains

Chinese firms win on price and speed. Zhao gave a blunt example on transformers: “If you buy from Korea you have to wait two to three years. If you have to urgently build out your grid for a data centre, you cannot wait for two years.”

That speed advantage, mixed with cheap production, explains why both CATL and Sungrow have seen foreign revenue surge since 2018, the year TRUMP first raised tariffs on Chinese goods.

And it’s not just batteries and transformers. US data-center operators buy optical transceivers from China’s Zhongji Innolight and circuit boards manufactured inside China. Despite loud talk of breaking supply chains, America still relies heavily on Chinese inputs for its AI build-out.

Still, this may shift. Next year, the Trump administration plans to raise tariffs on Chinese batteries from 30.9% to 48.4% and tighten rules so equipment with high Chinese content struggles to qualify for federal tax credits.

HSBC noted that many US buyers rushed installations this year ahead of those new rules, calling it “frontloaded installation in the US ahead of the implementation of the foreign entity of concern requirements.”

Join Bybit now and claim a $50 bonus in minutes