>>> US Gapping down

Gapping down
Other news:
  • USAU -3.8% ( closes private placement of 1,922,159 shares at a price of $16.25 per share )
  • JACK -2% (completes sale of Yadav for about $119 mln),
  • GENC -1.7% (announces the retirement of EJ Elliott, who serves as the Executive Chairman of the Company's Board of Directors, effective December 31, 2025)
  • NBIX -1% (Phase 3 KINECT-DCP study did not meet primary or secondary endpoints)
  • UMAC -1% (receives purchase order value at $3.75 mln)

>>> US Gapping up

Gapping up
Other news:
  • SOC +17.4% (discloses that the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration notified Sable Offshore that it has approved the company's restart plan for the Las Flores pipeline system )
  • ZIM +13.7% (updates on ongoing strategic review),
  • NVO +8.5% (Wegovy pill approved in the US as first oral GLP-1 for weight management )
  • PSN +5.6% (awarded a Missile Defense Agency SHIELD contract worth up to $151 bln),
  • OSS +4% (receives follow-on production order from Safran Federal Systems)
  • STNE +1.7% (authorizes new R$ 2 bln share repurchase program),
  • IVVD +1.7% (earns fast track designation for VYD2311, a vaccine-alternative antibody to prevent COVID)
  • ZLAB +1.4% (announces that China's National Medical Products Administration approved the New Drug Application for COBENFY for the treatment of schizophrenia in adults)
  • NUAI +1.4% ( has entered into a binding agreement to acquire Sharon AI's 50% ownership interest in Texas Critical Data Centers LLC )
  • ITRG +1.3% (full conversion and repayment of Beedie Capital convertible debenture),
  • RTX +1.1% (awarded a $841 mln Army contract),
  • TRMD +1% (has been informed by Oaktree (OAK) that Hafnia Limited's acquisition was completed on 22 December 2025)
  • GTN +1% (announces NBC (CMCSA) affiliation renewal )

>>> Europe : Brokers Upgrades & Downgrades - 23rd of December 2025 V2(+)

>>> Up


>>> Down
* Clearwater Analytics Cut to Neutral at Piper Sandler; PT $24.55
* Coty Cut to Inline at Evercore ISI; PT $7
* Coty Cut to Neutral at Grupo Santander; PT $3.50
* UniCredit Cut to Neutral at Intesa Sanpaolo; PT 73.20 euros (+)

>>> Initiation
* Cellectis ADRs Rated New Buy at Clear Street; PT $9
* Levi Strauss Rated New Outperform at Raymond James; PT $26

>>> Call
* Citi Downgrades China Stocks, Lifts Taiwan on AI and Earnings
* Morgan Stanley Says Canada’s Loonie May Surprise With 2026 Rally

>>> What to look at today - 23rd of December 2025

 Stocks in Asia climbed for a third day after bullish momentum lifted shares on Wall Street, indicating that a much-expected year-end rally was taking hold. The yen strengthened.  MSCI Inc.’s gauge of Asia Pacific stocks rose 0.6% on Tuesday after a global index set a fresh closing record. US futures were steady after the S&P 500 added 0.6% overnight. In commodities, gold advanced to yet another all-time high — the 50th day it’s broken records this year. Silver also hit a new peak. The Japanese yen remained a key focus for currency traders, rising for a second day to strengthen past the 157-per dollar level. That was after Finance Minister Satsuki Katayama said in an interview the nation has a “free hand” to take bold action against currency moves. The comments were her strongest warning yet to speculators following the yen’s weakening to as much as 157.78 even after the central bank hiked interest rates on Friday. Yen’s rebound was also aided by the euro’s strength, while a broad gauge of the dollar dropped further following a 0.4% decline on Monday. The upbeat mood among equity investors helped the S&P 500 erase December losses overnight and put it on course for an eighth straight month of gains, which would mark the longest winning run since 2018. Tesla Inc. and Nvidia Corp. led megacaps higher. After another strong year for stocks, the big question is whether investors will carry that positive mood into 2026. Positioning in equities is rising and fund managers are maintaining record low levels of cash. Their expectations of a further rally are outweighing concerns over rich tech valuations. The Federal Reserve path is also being closely watched, with two rate cuts priced for next year. Fed Governor Stephen Miran told Bloomberg Television the central bank risks sparking a recession unless it continues lowering rates next year. Chinese stocks underperformed in Asia after they were downgraded by strategists at Citigroup Inc., who cited less favorable earnings revisions and a lackluster macro outlook. The team upgraded Taiwan to overweight from neutral, citing its deep links to global AI supply chains. Separately, the US Federal Communications Commission said it would ban most foreign-made drones and critical components for unmanned aircraft systems going forward, a day ahead of a deadline for adding Chinese drone-maker SZ DJI Technology Co. to the agency’s so-called covered entity list.
Elsewhere, oil steadied after a four-day run of gains as the US continued its blockade of shipments of crude from Venezuela. Brent was near $62 a barrel after rising about 5% over the previous four sessions while West Texas Intermediate was close to $58. The US has taken control of two tankers and is in pursuit of a third, as Washington intensifies pressure on the government of Nicolas Maduro. US After Hours ZIM +13.7% following updates on ongoing strategic review; PSN +5.6% nicely higher SHIELD contract; NBIX -1% after Phase 3 study did not meet primary endpoints.

Nikkei +0.01% Hang Seng -0.23% CSI +0.05% Shanghai -0.07% Shenzen -0.24%

Eur$ 1.1779 CNH 7.0205 CNY 7.0283 JPY 156 GBP 1.3490 CHF 0.7895 RUB 78.5679 TRY 42.8216 WTI$ 57.90 -0.19% Gold 4,486 +0.94% BTC 88,040 -0.24% ETH 2,986 +0.1% SOL 125.5027 +0.37%

S&P -0.10% Nasdaq -0.12% EuroStoxx +0.03% FTSE -0.11% Dax +0.03% SMI +0.03%

Macro :
- Europe Car Sales Rise in November as Budget EVs Lure Consumers
- BofA’s Moynihan Says AI’s Economic Benefit Is ‘Kicking In More’
- Quantum-Computing Stocks Soar, With D-Wave Jumping More Than 20%
- Cheng Family to Seek Sale of London Rosewood as Pressures Mount
- VIX Divergence With Gold and Silver Is Complacency Warning
- Canadian Stocks Gauge Hits 32,000 for First Time as Gold Rallies
- Goldman Sachs Group Inc. is planning to expand its acquisitions and investments in Japan’s booming corporate deals market over the next decade by about ¥800 billion ($5.1 billion), with a focus on mid-sized firms.
- Citigroup Inc. will further increase its investment banking team in Japan to capitalize on a record-breaking boom in mergers and acquisitions that it expects to reach new heights.
- Huawei Technologies Co.’s ultra-luxury Maextro S800 sedan is so popular in China nowadays, it’s outselling Porsche AG’s Panamera, Mercedes-Benz Group AG’s S-Class and all other vehicles with sticker prices of at least $100,000.

Keep an eye on :
- ALO FP : Alstom Wins €393 Million Train Supply Contract in Greece
- AZM IM : Azimut’s Ali Sgr Gets 8% of Maire Unit NextChem: Sole
- COIN US : Coinbase Acquires The Clearing Company in Prediction Market Push
- DOV IM : DoValue Starts Fund Focused on State-Guaranteed Loans
- ETHZ US : Thiel-Backed Crypto Hoarder ETHZilla Sells Tokens to Pay Debt
- GOOGL US : First Solar Shares Rally Along With Alphabet’s Clean Energy Deal
- ISS DC : ISS Renews Contract With New South Wales Department of Education
- MBG GY : Mercedes Agrees to Pay $120 Million to Settle US Diesel Claims
- NBIX US : Neurocrine’s Phase 3 Study of Valbenazine Did Not Meet Endpoints
- NOVOB DC : Novo Nordisk Gets US Approval for Wegovy Obesity Pill
- NVDA US : Nvidia H200 China Sales Information Demanded by Warren, Meeks
- RANA NO : Champion Iron Shares Gain on Pact to Buy Miner Rana Gruber
- RYA ID : Ryanair Climbs Past No-Thrills Peers With Tight Cost Control
- SAN FP : Sanofi’s, Regeneron’s Dupixent Approved in Japan for Children
- TTALO FH : Terveystalo Buys Hohde Group at €88m Enterprise Value
- TSLA US : Tesla 4Q25 Delivery Forecast Trimmed by UBS, Sees Low US Sales
- TSLA US : Elon Musk Demanded Tesla’s Electric Doors Despite Safety Worries
- 2202 HK : Vanke Reprieve Still Leaves $1.3 Billion of Dollar Debt at Risk
- xAI : xAI Partners With Pentagon to Expand US AI Platform
- 1810 HK : Xiaomi Says It Has No Ties With Chinese Military
- ZIM US : Zim Gains as the Shipping Firm Continues to Evaluate Offers

>>> Europe : Brokers Upgrades & Downgrades - 23rd of December 2025

>>> Up


>>> Down
* Clearwater Analytics Cut to Neutral at Piper Sandler; PT $24.55
* Coty Cut to Inline at Evercore ISI; PT $7
* Coty Cut to Neutral at Grupo Santander; PT $3.50

>>> Initiation
* Cellectis ADRs Rated New Buy at Clear Street; PT $9
* Levi Strauss Rated New Outperform at Raymond James; PT $26

>>> Call
* Citi Downgrades China Stocks, Lifts Taiwan on AI and Earnings
* Morgan Stanley Says Canada’s Loonie May Surprise With 2026 Rally

NYT : The Pentagon and A.I. Giants Have a Weakness. Both Need China’s Batteries,

The Pentagon and A.I. Giants Have a Weakness. Both Need China’s Batteries, Badly.
As warfare is reinvented in Ukraine, and Silicon Valley races to maintain its A.I. lead, China’s battery dominance is raising alarms far beyond the auto industry.

In Northern Virginia’s Data Center Alley, windowless buildings the size of aircraft hangars are powering America’s artificial intelligence industry, which is locked in a race against China.

Yet, these data centers are increasingly reliant on China, America’s geopolitical rival, for a vital technology: batteries.

These facilities can use as much electricity as a small city, straining local power grids. Even flickers can have cascading effects, corrupting sensitive A.I. computer coding.

To cope, tech giants are looking to buy billions of dollars of large lithium-ion batteries, a field in which “China is leading in almost every industrial component,” said Dan Wang, an expert on China’s technology sector at Stanford’s Hoover Institution. “They’re ahead, both technologically and in terms of scale.”

A short drive from the data centers, at the Pentagon, military officials are sounding similar warnings, for different reasons. Military strategists, watching as modern warfare is reinvented in Ukraine, say the armed forces will need millions of batteries to power drones, lasers and countless other weapons of the future.

Many of those batteries, too, come from China.

Chinese battery dominance has long been a problem for industries like auto manufacturing, but now is increasingly being viewed as a national security threat. Currently, U.S. military forces rely on Chinese supply chains for some 6,000 individual battery components across weapons programs, according to Govini, a defense analytics firm.

“The reality is very stark,” Tara Murphy Dougherty, Govini’s chief executive, told a recent gathering of top defense and industry officials in California. “There are foreign parts in 100 percent of our weapon systems and military platforms.”

China understands the importance of these batteries. On Oct. 9, amid growing trade disputes, China threatened to limit exports of some of its most advanced lithium-ion technologies, including fundamental components like graphite anodes and cathodes.

The Trump administration is facing a dilemma.

When President Trump came to office, his administration initially froze billions of dollars in Biden-era federal grants for battery manufacturing, lumping batteries in with electric vehicles, solar farms, wind turbines and other clean energy technologies Mr. Trump had sought to de-emphasize. Mr. Trump has been scornful of electric cars, calling them a “scam.”

Yet more recently, the administration has come to see battery technology as pivotal for many of the things it cares most about, including A.I. and defense. In interviews, more than a dozen battery-industry executives, lobbyists, military experts and others close to the administration said the White House had taken a growing interest in fostering a domestic battery industry disentangled from China.

In recent weeks the White House has held high-level meetings on the battery supply chain, according to three people familiar with the matter. The National Energy Dominance Council, which Mr. Trump established to coordinate energy policy, has been meeting with battery companies. The Energy Department has quietly allowed many Biden-era grants for battery makers to proceed. It also recently announced up to $500 million for battery materials and recycling projects.

The administration has started investing in companies that develop battery components or critical minerals, including Eos, a next-generation battery company. As part of a trade deal, officials prodded Japan to promise to invest billions of dollars in U.S. battery manufacturing. And the National Defense Authorization Act, passed this month, includes Pentagon restrictions on battery purchases from “foreign entities of concern,” primarily China.

The administration is saying “we don’t like electric vehicles, but we do need batteries for drones and data centers and A.I.,” said Samm Gillard, executive director and co-founder of the Battery Advocacy for Technology Transformation Coalition, a trade group. “They’re recognizing that China’s stranglehold on the battery supply chain is undermining our national security.”

Taylor Rogers, a White House spokeswoman, said President Trump was “deploying all aspects of the government to work closely together” to “ensure the U.S. is the global leader in critical mineral and battery production.”

Experts say that building an industry not dependent on China will be enormously difficult. China is dominant in lithium iron phosphate batteries, or LFP, preferred for both E.V.s and for stationary storage.


In 2024, China made 99 percent of the world’s LFP cells and more than 90 percent of the main components, according to the International Energy Agency. That dominance extends to the refining of raw materials like lithium and graphite, as well as to fundamental components like cathodes and anodes that drive the movement of electrons within batteries.

The United States has its own lithium deposits and battery start-ups. But experts say it may take a coordinated effort and government support to compete against heavily subsidized Chinese competitors. Refining critical minerals can also be a hazardous process and American environmental standards could make the process much more expensive than in China.

Analysts estimate it would take at least half a decade for U.S. manufacturers to produce enough LFP cells to meet domestic demand, and much longer to create supply chains for underlying components.

Fatih Birol, the I.E.A.’s executive director, likened the world’s reliance on China to Europe’s dependence on Russian natural gas. After Russia attacked Ukraine, there were concerns that Moscow would cut supplies.

“Reliance for a strategic commodity or a technology on one single country, one single trade route,” Mr. Birol said, “is always risky.”

The dilemma represents a shift in the A.I. race, which increasingly hinges on a nation’s electrical infrastructure — its ability to reliably deliver vast amounts of electricity to power-hungry data centers — as much as on computing chips.

“Electricity is not simply a utility,” the A.I. giant OpenAI said in an October letter. “It’s a strategic asset that will secure our leadership on the most consequential technology since electricity itself.”

Battery dominance is a big part of China’s growing lead in power generation overall, including renewable energy. China has long seen batteries as an industrial and military priority, according to Mr. Wang, the Hoover Institution expert.

A.I. experts say U.S. companies still lead in computing capacity. Yet there is a rising concern that China’s advantage in energy infrastructure could help the country pass the United States.

“I’ve called A.I. ‘Manhattan Project 2,’” Chris Wright, the energy secretary, said in September, referring to America’s effort in the 1940s to make nuclear weapons. If “China got meaningfully ahead of us in A.I., we’d become the secondary nation of the planet,” he added.

Why data centers want batteries
The engineers who keep data centers humming refer to the “five nines” of reliability. That is, they strive to keep the facilities online 99.999 percent of the time.

Doing so demands reliable power. Tech giants have been scrambling for energy from natural gas or existing nuclear plants, which can run at all hours, and are making bets on nascent technologies like smaller reactors or advanced geothermal plants.

“It’s get what you can get,” said Justin Gruetzner, an executive with Burns & McDonnell, a data center engineering firm.

Batteries are increasingly critical: Most data centers rely on them for backup. Batteries can provide instantaneous power in an outage while generators fueled by natural gas or diesel fire up, helping ensure that data isn’t lost.

A.I. has particularly immense energy needs. An A.I. query can require about 10 times the electricity of traditional internet searches, the Electric Power Research Institute estimates. And the vast computing power can cause significant fluctuations in energy demand.

Power “can fluctuate dramatically multiple times a minute,” said Chris Brown, chief technical officer at the Uptime Institute, a data-center advisory body. At scale, these swings can amount to tens or hundreds of megawatts and even damage power grid infrastructure, Microsoft researchers have warned.

Even minor disruptions can lead to what’s known as “silent data corruption,” an emerging concern where A.I. hardware produces calculation errors. During one experiment, “a silent data corruption error actually broke the model,” said Jeffrey J. Ma, lead author of a paper on the phenomenon.

The lithium-ion batteries that China dominates are becoming increasingly prevalent. In February Google said that it had installed more than 100 million cells across its data centers and had started to replace diesel generators with batteries. Microsoft said it aimed for its data centers to eliminate diesel fuel for backup by 2030 to meet environmental goals.

Batteries and the realities of war
Among the lessons from the horrors of Ukraine is a daunting realization: The future of military power rests with batteries.

Many battlefield drones are powered with lithium batteries that rely on materials and technology from China. Within Ukraine, Chinese export controls have slowed production and tripled the prices for some components, according to defense analysts.

“Every Chinese export restriction since 2022 has reverberated directly onto the battlefield,” said Catarina Buchatskiy, a defense expert at the Snake Island Institute, which focuses on military technology. The U.S. could soon face the problem, she said, adding that the kinds of components Ukraine has struggled to secure “are embedded across Western defense programs.”


Lasers, hand-held radios, night vision goggles, satellites and drones use advanced batteries. The average soldier carries as much as 25 pounds of batteries for a standard 72-hour patrol.

And the shift toward stealthier vehicles, unmanned systems, electronic warfare and constellations of small satellites have swelled demand, said Jeffrey Nadaner, who was deputy assistant defense secretary for industrial policy during the first Trump administration. Shoring up America’s battery industry, he said, merits an effort on par with “the Apollo space program.”

The Pentagon is paying attention. The 2025 National Defense Authorization Act mandated a new battery strategy, and in a white paper published this year, the Defense Logistics Agency said the department should treat battery technology as mission-critical.

Elaine K. Dezenski, an expert on geopolitical risk and supply-chain security at the Foundation for Defense of Democracies, said, “When we think about the future of manufacturing and defense, and how we should be protecting critical supply chains, the chips are the brain, and batteries are the heart.”

In 2024, the start-up Group14 Technologies won a $200 million Biden administration grant to build a factory in Moses Lake, Wash., to produce a substitute for graphite, a key material that today mostly comes from China. But after Mr. Trump took office, Group14’s grant got tied up in a broader effort by the administration to freeze clean energy funding.

After an extensive review, the Energy Department allowed many battery grants to move forward “because the administration recognized that this isn’t about left versus right or green versus not green,” Rick Luebbe, Group14’s chief executive, said.

Still, he said, the factories that Group14 is building will be able to displace only a fraction of Chinese materials. To compete with China’s industrial subsidies, Washington would need to do more. “I see more tolerance for battery projects. What I don’t see is investment,” he said.

Other battery companies have noticed the administration’s new receptiveness. “The Biden administration liked our sustainability story,” said Judy Brown, head of external affairs at South32, a company that has received federal support to develop an Arizona mine for manganese, a key battery material. “The Trump administration likes the national-security story.”

One question, experts say, is whether the United States can sustain a domestic industry, even as sales of electric vehicles slow, undermined by Mr. Trump’s policies.

Trump officials have “softened their tone on batteries,” said Noah Gordon, an expert on sustainability and geopolitics at the Carnegie Endowment for International Peace. “But the policy is still incoherent” because of its hostility toward E.V.s, he said. “They’re trying to boost battery manufacturing while also undermining the biggest sources of demand.”

FT : EU moves against cheap plastics imports as recycling plants shut

EU moves against cheap plastics imports as recycling plants shut
European Commission plans additional checks and stricter rules to shore up ailing industry

The EU is preparing checks on imported plastics and other measures to shore up its recycling industry, after a wave of plant closures driven by sluggish demand and cheap imports, including from China.

Proposals, expected as soon as Tuesday, include checks on imports to ensure they are recycled, moves towards a single market for waste and clearer rules for chemical recycling.

Jessika Roswall, EU environment commissioner, told the Financial Times the industry was in “deep crisis”, adding: “It’s important to make some changes now.”

She said 10 plants had closed in the Netherlands alone over the past 18 months. Across the bloc, about 1mn tonnes of recycling capacity had shut in the same period — the equivalent of France’s annual output.

The EU plans to step up monitoring of imports and introduce a new customs code to distinguish recycled plastic from new material.

“We need to have a level playing field because today there is this sense that not all recycled plastic that is coming into Europe is really recycled: It could be virgin. We lack the information,” Roswall said.

“There is an overflow of plastic coming in from third countries,” she added.

Imports from China continue despite EU anti-dumping duties imposed in 2024. 

The commission will also ask the 27 member states to approve a single criterion for when recycled material changes from waste to fresh material. That would make it easier to ship plastic across borders to increase the efficiency of the industry.

“We need to have one single market for waste. We need to see waste as a resource not trash — how do we turn trash to cash?” Roswall said. 

The move is partly a response to a letter from six member states, including the Netherlands and France, in November.

“Several European producers which have invested in the sector’s shift towards circularity and plastic recyclers have been forced to reduce production or close factories,” the letter said. It demanded greater incentives to use recycled content and protection from imports. 

Roswall said: “We need to see that we get the business case of the recyclers. Today it is sometimes cheaper to buy virgin materials, and that is not sustainable.”

Installed plastics recycling capacity in the EU reached 13.2mn tonnes in 2023 but is forecast to fall by 1mn tonnes by 2025, according to the Commission.

The plan also seeks to address regulatory barriers that have held back chemical recycling.

Companies were asking whether the technology will be allowed, Roswall said. “Yes we will use chemical recycling and that means that ‘yes, you can invest in this because we see that it is a part of the industry for the future’.”

For the first time, chemically recycled plastic will be allowed to count towards a target requiring 25 per cent recycled content in PET drinks bottles this year. Officials say the target has been met, but it will rise to 30 per cent from 2030.

FT : America’s risky bet on hydrocarbons might hurt it in the AI race

America’s risky bet on hydrocarbons might hurt it in the AI race
US strategy could be costly in terms of higher electricity prices, increased water stress and potential food insecurity

“The United States is in a race to achieve global dominance in artificial intelligence.” These are the opening words of the White House’s AI action plan that is based on accelerating innovation, building AI infrastructure and leading in international diplomacy and security.

For the Trump administration, winning in AI is clearly at the heart of the battle for the 21st century and keeping the US as one of the leading (and richest) global economies. It is key to offsetting the productivity drag from worsening demographics. US trend productivity has slowed from a rise of more than 2.5 per cent a year in the 1960s, to about 1.5 per cent a year in the past 20 years. And US demographics will probably put further downward pressure on productivity, without labour-enhancing technological change.

As Yale associate professor Michael Peters argues in an article for the IMF, America must rediscover its dynamism if it is to maintain its global standing. This is why an explicit part of the US AI plan is to invent and embrace productivity-enhancing AI uses that the world wants to emulate. My company’s own analysis suggests that AI has already raised US labour productivity by 0.1 to 0.9 percentage points and might eventually raise global productivity growth by about a half point annually over the coming decade.


However, increasingly, the key limit to the US leading the AI arms race is less technological and more the physical limits that AI places on US energy demand.

The International Energy Agency estimates that global data centre electricity demand will more than double, from 460 terawatt hours of electricity in 2024 to more than 1,000TWh by 2030 and will reach 1,300TWh by 2035. In the US, it expects data centres will account “for nearly half of electricity demand growth between now and 2030”.

But it is not just the scale of the energy demand needed for US AI that is the issue. It is also the role hydrocarbons play in fuelling this growth. The IEA expects more than half the electricity powering US data centres to still come from fossil fuels, notably natural gas, until after 2030. But even by 2035, the IEA forecasts more than 40 per cent of US AI energy being hydrocarbon-based due, in part, to the Trump administration’s cancellations of support for renewable energy initiatives.


While China also relies on hydrocarbons (mainly coal) to power its data centres, it is looking to change this mix. Its strategy is focused on developing computing resources close to coastal renewable power sources. The IEA estimates that, unlike the US, China will see the level, as well as the share, of data-centre electricity generation coming from hydrocarbons falling after 2030.

One strategic risk from this US AI reliance on hydrocarbons is relative costs. US average electricity prices have already risen 38 per cent since 2020 with these cost increases often linked to rising AI data centre demands. These cost pressures are only likely to rise. In contrast, the cost curves for renewables continue to come down faster than for fossil fuels, potentially disadvantaging US AI vs Chinese AI in the longer run.

However, the bigger strategic challenge for US hydrocarbon-powered AI may not only be price, but also its physical impact on the economy. Energy, water and food production are intimately linked. The increased US energy needs for AI, when powered by hydrocarbons, will lead to more US water demand and stress than if AI growth were powered by renewables.

To make matters worse, two-thirds of the new US data centres built, or planned, since 2022 have been located in places of elevated water stress, according to Bloomberg analysis. As a result, the risks to longer-term US food security from hydrocarbon-powered AI could be a major constraint.

As the US “bets the farm” on using hydrocarbons to power a rapid data centre build-out, China is relying on a slower process, using a more sustainable energy mix.

Thus, the US strategy could be costly, not only in terms of higher electricity prices, potentially limiting the return on investments in AI, but also increased water stress and potential food insecurity. In exchange for these increased strategic risks, society will probably demand real, tangible benefits — a modestly faster search engine will seem a poor trade-off. The bigger strategic risk is that while the US may win the initial AI battle, it might end up losing the war due to its reliance on hydrocarbon energy.