Chinese companies dominate the supply chain for essential components used in American AI data centers, supplying approximately 30% of transformers and switchgear, over 40% of U.S. battery imports, and nearly two-thirds of global optical transceiver supply. In response to this strategic dependency, the Trump administration declared a national emergency regarding foreign bulk-power system equipment and is considering a ban on imports of Chinese optical transceivers. U.S. data center capacity is projected to grow from 62 GW in 2026 to 152 GW in 2030, increasing demand for critical components while transformer and substation shortages already reach 15% and 8% respectively. Manufacturers such as Hitachi Energy and Siemens Energy are each investing one billion dollars to expand U.S. production of these strategic components.
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