Chinese data center builders chase the U.S. AI infrastructure boom

The United States hosts 5,427 artificial intelligence data centers in 2025, twelve times the 449 counted in China, according to Stanford's Institute for Human-Centered Artificial Intelligence. The dataset, drawn from public filings and operator disclosures, shows the gap widening each quarter. Chinese manufacturers, operating from a smaller domestic market, now treat the U.S. AI infrastructure boom as their most lucrative export opportunity.

U.S. tech giants Alphabet, Microsoft, Meta, and Amazon will spend roughly $765 billion on AI infrastructure this year. JPMorgan Chase chief executive Jamie Dimon told reporters the figure could reach $1 trillion in 2026. China's central government has committed $295 billion to data center construction over five years, a sum that falls well short of annual U.S. private-sector outlay.

"We can see very big potential in the U.S. market," said S.K. Lee, global vice president at Singapore-registered Brightray. "The China market is equally important, but we can see that there's a stronger demand in the U.S."

Lee operates from Singapore. Brightray functions as the international sales arm of PrefabDC, a Chinese prefabricated data center manufacturer with a factory in Yangzhou, an eastern trading hub. Brightray handles overseas construction. PrefabDC supplies the modules.

The corporate structure positions the Singapore entity outside direct U.S. tariff exposure. Component flows, however, remain Chinese in origin.

Why Chinese builders want U.S. contracts

The U.S. market offers scale Chinese cloud operators cannot match. Alibaba, Tencent, and Baidu have committed far less to AI data center capacity than their U.S. counterparts. Jeffrey Ding, assistant professor at The George Washington University and a researcher of Chinese AI policy, attributes the gap to revenue per service.

"Chinese companies just are not generating as much revenues from their AI services," Ding said. "And that's one of the reasons why they're not able to invest in these enormous data center buildouts that their competitors in the U.S. are doing."

The revenue shortfall traces to demand. Chinese enterprise customers have not adopted paid AI tools at U.S. rates. The deeper issue, Ding said, is "there is not as much demand for the AI services."

That imbalance pushes Chinese vendors outward. PrefabDC's Yangzhou plant illustrates the model. The factory receives transformers (high-voltage devices that step down grid power for server halls), batteries, fiber-optic cables, and switchgear from domestic suppliers, then assembles prefabricated modules for overseas shipment.

"These materials, equipment are sourced from different parts of the world and a very big portion come from China because China's supply chain is very integrated and comprehensive," Lee said. "That's the reason why we have the factory here in China."

Lee declined to disclose the plant's annual module output. He said the facility can scale to meet additional U.S. orders. The bottleneck, he added, sits in shipping logistics, not fabrication capacity.

What does prefabrication offer that stick-built construction does not?

Prefab methods move most construction indoors. Workers assemble the building shell, electrical systems, and cooling infrastructure inside a controlled factory floor. The completed modules ship to site for crane placement and final connection.

Brightray claims the approach cuts U.S. build time by at least half. Industry analysts put average U.S. data center construction at two to three years.

The compression matters because U.S. operators face acute component shortages. Electrical equipment, transformers, and switchgear carry long lead times, measured in months, from domestic suppliers. Chinese vendors can deliver faster, though tariff exposure now complicates the calculus.

Prefab construction exists in the U.S. market already, though mostly for interior modules. Brightray's pitch covers exterior walls and structural skins, a more complete building envelope. The advantage, the company argues, is weather independence. On-site work in Texas, Arizona, or Virginia often stalls through summer heat or winter storms. Indoor fabrication eliminates that variable.

What are the political risks?

Geopolitics complicates every shipment. President Xi Jinping's visit to Washington revived bilateral dialogue on AI, yet the Trump administration is weighing bans on Chinese open-weight AI models and on specific data center components. Cybersecurity concerns top the policy agenda. American security officials fear critical infrastructure dependence on Chinese suppliers could hand Beijing leverage in an AI race the U.S. currently leads.

"It is a very challenging environment between the geopolitics recently between the tariffs we've been seeing and the recent bans," said Benjamin Boucher, principal analyst for supply chains at Wood Mackenzie, a global energy and commodities consultancy. "I think it is just going to depend on what we see at a political level over the coming years in terms of how it evolves."

Boucher, who tracks data center procurement across North America, argues the U.S. cannot easily decouple. Domestic transformer production cannot meet hyperscaler (large-scale cloud operators running AI workloads) demand. China, Boucher said, "can offer those at a much more favorable timing."

"China is definitely very important towards the U.S. supply chain for data centers at the moment," Boucher said.

American policymakers fear two distinct outcomes. First, embedded Chinese components could carry firmware (factory-installed software controlling hardware functions) vulnerabilities that allow remote access. Second, supply concentration gives Beijing a chokepoint. Either outcome complicates Washington's calculation as it competes with Beijing for AI primacy.

How exposed is the U.S. to Chinese inputs?

China supplies an estimated majority share of several data center categories consumed in the U.S.:

• Transformers for power distribution
• Lithium-ion battery backup systems
• Fiber-optic cabling for inter-rack connectivity
• Switchgear for medium-voltage distribution

No single domestic alternative matches Chinese output volume. The U.S., Boucher said, "does not have a lot of what it needs domestically," a structural gap that Chinese suppliers fill on price and lead time.

What comes next for Brightray and PrefabDC?

Brightray has not disclosed U.S. contract values. Lee said the company is in active talks with hyperscalers and colocation providers (firms that rent server space to multiple tenants). The Yangzhou factory can scale output to meet additional orders, Lee added, but final investment decisions hinge on tariff classification and customs treatment.

The Trump administration's decision on Chinese data center components, expected within months, will set the boundary. A narrow ban covering only finished servers would leave component flows intact. A broad ban covering transformers and switchgear would force U.S. operators to find alternative suppliers, a transition that supply chain analysts say could extend project timelines.

China's domestic AI data center count may yet close the gap. The $295 billion state plan targets capacity additions through 2029. Stanford's 2025 tally places China at 449 facilities, a base that will multiply if state financing executes on schedule. Until then, U.S. sites will continue to absorb Chinese-made modules, at least until Washington rules otherwise.