China suppliers target U.S. AI data center expansion amid policy risks

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China suppliers eye U.S. AI data centers

Highlights

U.S. will have 5,427 AI data centers in 2025 versus 449 in China, with U.S. tech giants investing about $765 billion in AI infrastructure this year.
China's supply chain advantage enables firms like Brightray and PrefabDC to halve U.S. data center construction times versus the two to three year industry average.
Geopolitical risks persist as U.S. policymakers consider bans on Chinese AI models and components amid heavy domestic reliance on Chinese-made electrical equipment and fiber-optic cables.

U.S. demand draws Chinese suppliers

As reported by CNBC, Chinese suppliers and related infrastructure groups are increasingly focusing on the U.S. market, where AI data center construction is running well ahead of China. Brightray, a Singapore-registered AI infrastructure company whose sole manufacturer is Chinese firm PrefabDC, says demand in the U.S. is stronger even though China remains an important market.

The gap in buildout is pronounced. The U.S. has 5,427 AI data centers in 2025, compared with 449 in China, according to data published by the Stanford Institute for Human-Centered Artificial Intelligence. U.S. tech giants including Alphabet, Microsoft, Meta and Amazon are estimated to spend about $765 billion combined this year on AI infrastructure, and JPMorgan Chase CEO Jamie Dimon recently says that figure could reach $1 trillion next year.

By comparison, Chinese companies such as Alibaba are committing far less, even as Beijing outlines plans to invest $295 billion in data centers over the next five years. Jeffrey Ding, an AI expert and assistant professor at The George Washington University, says Chinese companies are not generating as much revenue from AI services, limiting their ability to fund data center expansion on the scale seen in the U.S.

Supply chain advantage meets geopolitical pressure

Talks on AI between Chinese President Xi Jinping and U.S. President Donald Trump during Xi's visit to Washington are renewing attention on the commercial relationship, but political friction remains a major constraint. U.S. policymakers are concerned about cybersecurity and dependence on China for critical infrastructure, while the Trump administration is considering bans on Chinese open-weight AI models and additional categories of Chinese data center components.

Wood Mackenzie principal analyst Benjamin Boucher says the U.S. still lacks enough domestic supply in key areas such as electrical equipment, and long lead times are making Chinese sourcing attractive. He says China remains important to the U.S. data center supply chain, which already relies on Chinese-made products including transformers, batteries and fiber-optic cables.

Brightray argues China’s integrated manufacturing base also supports faster delivery. At its factory in Yangzhou, the company says a large share of materials and equipment comes from China because the supply chain is broad and tightly connected. The group says its prefabricated data centers, produced with PrefabDC, can cut U.S. construction time by at least half, compared with the industry average of two to three years.

Our earlier report covered a bipartisan U.S. bill that would restrict Chinese-made optical transceivers from use in sensitive federal systems, citing security concerns around AI data center and government communications hardware. We also noted industry warnings that removing major Chinese suppliers could disrupt supply chains and slow the pace of U.S. AI infrastructure deployment because domestic alternatives may not yet have sufficient scale.

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