In the age of AI, data centers are becoming the “factories of the future,” according to Chris Miller, author of Chip War. He suggests that the global competition for AI supremacy is shifting from ‘chip wars’ to ‘cloud wars,’ as countries like Saudi Arabia, the UAE, Kazakhstan, and Malaysia invest heavily in AI infrastructure. U.S. cloud companies are racing to dominate these markets, aiming to outpace Chinese tech giants. This battle is not just about technology but also geopolitical influence, highlighted by Microsoft’s new data center in Kenya, a venture with ties to Chinese firms that has raised security concerns in Washington. The stakes are high, and the tech competition is intensifying.
Data centers are becoming the powerhouses of the future as we dive deeper into the era of artificial intelligence (AI). Chris Miller, who wrote the book *Chip War*, recently shared his thoughts in the Financial Times about how the battle for AI might turn into a contest over cloud computing.
Miller explains that, just like how supercomputers were a big deal during the Cold War—where the US carefully controlled their access to the USSR—AI systems today are also important for both civilian and military purposes. This makes controlling AI data centers a major political and economic move.
Many countries are pouring money into building AI data centers. Nations like Saudi Arabia, the UAE, Kazakhstan, and Malaysia are growing their AI infrastructure and attracting investments from major US and Chinese companies. American tech firms are eager to enter these markets to compete with China and secure lucrative contracts.
US diplomats are also paying close attention to these data centers to prevent Chinese technology from gaining too much influence. For instance, Microsoft recently announced a new data center in Kenya, developed in partnership with G42, a UAE-based company connected to Chinese firms like Huawei. This partnership has raised security alarms in Washington, leading to calls for strict regulations.
In summary, Miller argues that chips, cloud computing, and data centers are closely connected. As high-end, export-controlled chips are crucial for efficient AI operations, the competition in technology is now moving beyond just chips to the entire cloud computing landscape.
Earlier this year, we discussed how the “Next AI Trade” would involve the electrification of AI technology. This means that massive tech companies need huge amounts of power to run their operations, and countless data centers spread across the country require even more electricity to keep everything running smoothly.
