American data centers, crucial for AI development, heavily depend on Chinese suppliers for essential components like transformers, switchgear, and batteries. Recent actions by the U.S. government, including an executive order from President Trump declaring a national emergency over foreign threats to the power grid, signal a shift in focus towards securing domestic supply chains.
Analysts note that approximately 30% of certain transformer and switchgear categories and over 40% of U.S. battery imports come from China, raising concerns about strategic vulnerabilities. The U.S. data center capacity is projected to grow significantly, from 62 GW in March 2026 to 152 GW by 2030, driven by AI workloads.
Companies like Hitachi Energy and Siemens Energy are investing heavily in U.S. production to address these vulnerabilities. However, potential bans on Chinese optical transceivers could lead to increased costs for U.S. hyperscalers, as they may struggle to find local alternatives quickly.
The current market already faces shortages in power transformers and substations, which could worsen with new restrictions. administration's push to de-risk AI infrastructure reflects a broader strategy to mitigate reliance on Chinese technology, reminiscent of challenges faced during the 5G rollout