U.S. Data Center Infrastructure Relies Heavily on Chinese Components Amid Rising Scrutiny
The U.S. is increasingly reliant on China for critical components in data centers powering artificial intelligence infrastructure, including transformers, batteries, and optical transceivers. As AI becomes central to the economy and national security, Washington has intensified scrutiny of foreign-made power equipment used in these facilities. Analysts warn that replacing Chinese manufacturing capacity with domestic or Western alternatives could be difficult, leading to higher costs and supply chain disruptions. President Donald Trump recently signed an executive order declaring a national emergency over risks posed by foreign bulk-power system components, authorizing the Energy Department to restrict certain transactions involving grid equipment used in data centers. The move reflects growing concerns about China's influence on U.S. infrastructure as Chinese AI models gain global traction and adoption. Chinese firms dominate key segments of the power stack for data centers, with over 30% market share in transformers and switchgear and more than 40% in battery imports to the U.S. Additionally, companies like Zhongji Innolight lead in optical transceiver supply chains.
Topics: AI infrastructure data centers supply chain U.S.-China relations