As the U.S. boom in building AI data centers continues, reliance on Chinese-made power and optical communications equipment is emerging as a new supply-chain risk. Concerns are growing that data center construction could slow due to equipment shortages and rising costs if the U.S. government tightens related regulations on national security grounds.

CNBC reported on Sept. 3 that U.S. big tech companies are investing billions of dollars in AI data centers, but depend on China’s supply chain for a significant portion of key infrastructure, including transformers, switchgear, batteries and optical transceivers.

U.S. President Donald Trump signed an executive order on Aug. 26 declaring a national emergency, saying that foreign-made large-capacity power facilities could pose a threat to U.S. security. Under the order, the Department of Energy can restrict or impose conditions on power equipment transactions it deems to pose security risks.

Exposure is particularly high in grid-connection equipment. Yury Dvorkin (유리 드보르킨), an associate professor at Johns Hopkins University, said China’s share in some transformer and switchgear items is nearing 30 percent, and China accounts for more than 40 percent of U.S. battery imports. Reliance on China is also high at the raw materials stage, including copper, electrical steel sheets and cathode materials for batteries.

The same applies to optical communications equipment. Counterpoint said Chinese companies, including Zhongji Innolight and Eoptolink, supply about two-thirds of global shipments of optical transceivers for data centers. It said Western companies such as Coherent and Lumentum would find it difficult to fully replace the shortfall within 12 to 24 months if the United States restricts imports.

Supply shortages of power equipment have already begun. Wood Mackenzie estimated that shortages of power transformers and substation equipment in the United States this year will be 15 percent and 8 percent, respectively. Shortages are especially severe for large transformers of 100 MVA or more.

In response, Hitachi Energy and Siemens Energy are each investing $1 billion (about 1.34 trillion won) to expand U.S. production of transformers and switchgear. The bottleneck in the AI race is shifting from advanced semiconductors to the power and communications infrastructure that supports them.