Delays in U.S. Data Center Construction Due to Supply Chain Constraints

The construction of AI data centers in the United States is facing significant delays, with nearly half of the planned builds for 2026 projected to be postponed or canceled. This situation arises primarily from shortages of essential electrical components, including transformers, switchgear, and batteries, which are critical for establishing the necessary power infrastructure. Despite substantial investments in AI infrastructure, estimated to exceed $650 billion by 2026 from major companies like Alphabet, Amazon, Meta, and Microsoft, the availability of these components remains a bottleneck.

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakersFuturismArs Technica

The ongoing trade tensions between the U.S. and China have exacerbated the situation. China, despite being a major source of electrical equipment, has seen U.S. tariffs impact the importation of crucial components. As a result, lead times for high-power transformers have increased dramatically, extending from 24-30 months before 2020 to as long as five years today. Analysts from Sightline Climate indicate that only one-third of the anticipated data center capacity is currently under construction, with many projects stalled in the pre-production phase.

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakers

The reliance on foreign manufacturers for electrical components is a critical issue. China accounts for over 40% of U.S. battery imports and nearly 30% of certain transformer and switchgear categories. While U.S. companies have turned to suppliers in Canada, Mexico, and South Korea to mitigate these shortages, the complexity of assembling these components from various sources leads to longer build times. The electrical infrastructure, which constitutes less than 10% of total data center costs, is essential for project completion; any delay in this supply chain can halt entire projects.

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakers

Donald Trump, who previously prioritized the rapid construction of AI data centers through executive orders, has faced criticism for the unintended consequences of his tariffs on Chinese imports. Reports indicate that many developers are willing to absorb tariffs to expedite the import of necessary components, highlighting a disconnect between policy intentions and on-the-ground realities. Trump has not publicly addressed the power infrastructure challenges in his recent directives to tech companies regarding data center construction.

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Critics argue that the current U.S. manufacturing capacity for electrical equipment is insufficient to meet demand, despite a decade of reshoring initiatives. This reliance on imports, coupled with ongoing geopolitical tensions, threatens to further disrupt supply chains and increase costs for data center developers. The situation raises concerns about the U.S.'s ability to compete in the global AI landscape if infrastructure issues remain unresolved.

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakers

As the demand for AI data centers continues to grow, the industry faces an urgent need to address supply chain constraints. Without significant improvements in the availability of electrical components, the ambitious plans for AI infrastructure may not materialize, potentially stalling advancements in the sector.

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakers

• “If one piece of your supply chain is delayed, then your whole project can’t deliver,” — Andrew Likens, Energy and Infrastructure Lead at Crusoe

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• “Contact me with news and offers from other Future brands Receive email from us on behalf of our trusted partners or sponsors Without resolving constraints in transformers, switchgear, and batteries, even trillions of dollars in AI investment may not translate into actual AI capacity, as deployments will depend on power infrastructure availability, not capital or compute hardware constraints.” — Bloomberg Report

Half of planned US data center builds have been delayed or canceled, growth limited by shortages of power infrastructure and parts from China — the AI build-out flips the breakers

• “They can make or break a project.” — Andrew Likens, Energy and Infrastructure Lead at Crusoe

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