How Much AI Does $1 Get You in China vs America?

And Does the H200 Change Anything?

This post originally appeared in ChinaTalk.

“Whether it’s chips for China or electricity for the U.S., whichever nation can solve its constraints will likely have the final laugh in the data center fight.”

The AI race between the U.S. and China will be decided in datacenters.

But who has the advantage? Does the recent H200 ban lift change anything? Many pieces relate vague vibes that the U.S. has better semiconductors while China has cheaper electricity, but they lack numbers. This piece tries to estimate how expensive a data center is in the U.S. versus China, and how much “AI” each data center would generate. This piece does not address Chinese access to chips in Malaysia or through smuggling, a phenomenon that potentially increases China’s access to compute drastically.

BLUF: The U.S. can build much more cost-efficient data centers compared to China, but unfettered access to the H200 would make the race in raw performance extremely close. Access to the H200 gives China a massive boost considering its domestic hardware production constraints. Lastly, the cost efficiency of these data centers is extremely sensitive to the costs of hardware, which is highly variable and not publicly disclosed.

Nearly all of the cost differential comes from two factors: construction and hardware. Other costs, including commonly covered topics like electricity and water, are essentially rounding errors. As such, the main article only covers those two bills, but calculations for everything else are included in the appendix. Because these calculations require some assumptions, I vibe-coded a website that allows you to play with my assumptions and see how the numbers change.