US AI Data Center Expansion Relies on Chinese Electrical Equipment Imports

AI Data Centers Aren’t Slowed by Demand or Capital. They’re Waiting on Equipment.

Tech companies like Alphabet Inc., Amazon, Meta Platforms, and Microsoft are expected to spend more than $650 billion this year building AI data centers.

But the main constraint is not funding or demand.

It is equipment.

The Bottleneck Is Basic Grid Hardware

A recent report from Bloomberg shows that data center construction is being slowed by shortages of essential electrical components: transformers, switchgear, and batteries.

These are not optional parts of a project.

• ●No transformer means no way to step down high-voltage power from the grid
• ●No switchgear means no safe way to control power inside the facility
• ●No batteries means no buffer for sudden changes in demand

Without them, projects cannot move forward.

Delays Are Already Showing Up

The impact is visible in the pipeline. Nearly half of planned U.S. data centers in 2026 could be delayed or canceled due to equipment shortages.

At the same time, analysts at Sightline Climate estimate that up to 12 GW of new data center demand could come online in 2026. Only about a third of that capacity is currently under construction.

The gap between planned demand and actual buildout is widening.

Lead Times Keep Expanding

A few years ago, large transformers took two to three years to deliver. Today, lead times can reach up to five years.

That timeline does not align with how quickly data center demand is growing.

Developers Are Adapting

Companies are adjusting their strategies to deal with the shortage.

• ●Refurbishing older transformers
• ●Pre-ordering equipment years in advance
• ●Building components in-house

One example is Crusoe Energy Systems, which has developed internal manufacturing for switchgear and other infrastructure.

Even with these adjustments, supply remains limited.

Heavy Reliance on Imports

The U.S. still depends on imports for critical components. Imports of high-power transformers from China increased from about 1,500 units in 2022 to more than 8,000 in 2025.

For batteries, China continues to dominate a large share of global supply.

Tariffs are adding another layer of pressure by increasing the cost of imported equipment and raw materials such as steel and copper.

Domestic Capacity Is Expanding, Slowly

Companies like GE Vernova and Siemens are investing billions to expand manufacturing capacity. But new factories take years to build and ramp up.

That means supply constraints will persist in the near term.

The Real Constraint

Developers are operating in a mismatch. Demand is immediate. Capital is available. But the equipment needed to build projects takes years to deliver.

That is the current limit on data center expansion.

The U.S. is trying to build faster. But today’s projects still depend on a supply chain that cannot scale at the same pace.