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CNBC — Technology · September 3, 2026

Hidden China risks are emerging in America’s multibillion-dollar AI data center boom

OperationsEconomics
THE AI ANGLE
Driving massive data center expansion that strains power and hardware supply chains

The rapid expansion of U.S. AI data centers has exposed an operational vulnerability: heavy reliance on Chinese suppliers for critical power stack equipment, including transformers, switchgear, batteries, and optical transceivers. As Washington imposes national security restrictions to curb these foreign components, hyperscalers face worsening supply chain shortages, longer lead times, and escalating capital costs due to limited Western manufacturing capacity.

THE TEACHING ANGLE
This case highlights the operational friction between geopolitical de-risking and supply chain efficiency, illustrating how sudden policy-driven decoupling can exacerbate acute capacity constraints and project lead times.

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