China is killing the US on energy. Does that mean they’ll win AGI? — Casey Handmer

**Dwarkesh Patel** (0:00)
Today, I'm interviewing Casey Handmer. Casey has worked on a bunch of cool things. Caltech PhD on some gravitational wave black hole gimmick stuff. Then Hyperloop, then the Jet Propulsion Laboratory at NASA, and now he is founder and CEO of Terraform Industries. Casey, welcome.

**Casey Handmer** (0:16)
Thank you. It's great to be here finally.

**Dwarkesh Patel** (0:19)
Big picture question I'm interested in. To the extent that AI just ends up being this big industrial race, who can build the most solar panels, who can build the most batteries, who can build the most GPUs and transmission lines and transformers and et cetera, et cetera. This is not what the US is known for, at least in recent decades. This is exactly what China is known for in the right, where they have like 20x the amount of yearly solar manufacturing the US has. Obviously, we have extra controls right now, but over time SMIC will catch up to TSMC's leading edge. So what is the story exactly of how the United States wins this? Why does China just not win by default?

**Casey Handmer** (1:00)
Do you think that China is better at capital allocation in the United States? Do you think the Chinese business environment is better for business than in the United States?

**Dwarkesh Patel** (1:06)
I think you're going to make these first principles argument about these other industries where they're killing it, but it doesn't seem to have hampered BYD or cattle.

**Casey Handmer** (1:13)
Look, they're so much better at building high-speed trains than the United States.

**Dwarkesh Patel** (1:15)
Right.

**Casey Handmer** (1:16)
I would never hold up a flag saying I'm really good at building high-speed trains. That is just a sign that you're really bad at capital allocation. Why would you devote in 2025 so much industrial effort and money?

**Dwarkesh Patel** (1:26)
They're devoting a lot to solar overcapacity, which in your opinion is the key to future industrial growth.

**Casey Handmer** (1:34)
Accidentally correct.

**Dwarkesh Patel** (1:34)
They call the most important thing correct, right? Which account for something.

**Casey Handmer** (1:37)
Well, they're in a similar situation to Europe, but unlike the United States. So the United States is the luckiest goddamn country on Earth because it's surrounded on two sides by oceans, and on the other two sides by friendly allies. China is surrounded by 15 countries who are mostly hostile to it, with no good mountain ranges or rivers or anything to really separate them. And then they get almost all the oil from the Middle East, in countries that they don't control, don't have strong diplomatic relationships with, on fleets of oil tankers that they can't defend because their Navy doesn't have the ability to operate effectively in the Indian Ocean.

**Dwarkesh Patel** (2:11)
But you're working on this, right? If you get synthetic fuels working at Terraform, doesn't that asymmetrically help China? Which might be fine. It does.

**Casey Handmer** (2:17)
It absolutely asymmetrically helps China. We're not currently working with China. We don't plan to, but the physics is very obvious. And synthetic fuels have been around for 100 years. There are projects in China right now working on synthetic fuels. It would not surprise me if they were thinking pretty seriously about this.

**Dwarkesh Patel** (2:30)
Just to spell out for the audience, if China has all this electricity production, and the bottleneck is that only a third of final energy use in a modern economy comes from electricity, the rest you need gas and whatever to transport things.

**Casey Handmer** (2:44)
Or coal. They use a lot of coal in China.

**Dwarkesh Patel** (2:45)
And what Casey is inventing is a technology to turn that electricity, which only can supply a third of end uses right now, into synthetic fuels, which can supply a hundred percent of the electricity your civilization needs. So then China's energy advantage then becomes overwhelming.

**Casey Handmer** (3:04)
This technology levels the playing field. It levels the playing field a lot. But at the end of the day, China still contains the poorest Chinese people anywhere on Earth. Never underestimate the capacity for an autocratic dictatorship to shoot itself in the foot.

**Dwarkesh Patel** (3:19)
I agree that they've obviously made bad decisions, but even if you have the poorest Chinese people anywhere in the world, they can still be quite rich. Like Singapore's rich or whatever. Also, there's parts of China which actually contain quite rich Chinese people. So you had to compare not all of China against the US, but Shanghai and Guangdong against the United States. So you can have a part of China that is as big as America and as wealthy as America and as innovative as America.