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Witnesses warn of chip, energy and supply‑chain risks as AI demand accelerates
Summary
Testimony before the House Oversight subcommittee highlighted national‑security and infrastructure vulnerabilities tied to AI: concentrated advanced‑chip supply chains, rapid energy buildouts overseas, risks of chip diversion, and the need to modernize U.S. power and manufacturing capacity for data centers.
Lawmakers and witnesses at a House Oversight and Reform subcommittee hearing flagged national‑security and infrastructure risks posed by rapid AI development, focusing on advanced‑chip supply chains, power capacity for data centers and the need for export controls and enforcement.
Samuel Hammond, chief economist at the Foundation for American Innovation, told the committee the United States’ advantage in AI is closely tied to hardware and computing resources. “America's existing lead is downstream of our massive advantages in AI hardware and data centers, but this is tenuous at best,” Hammond said, urging stronger export controls on advanced semiconductors and faster investment in domestic manufacturing.
Hammond and other witnesses raised several specific concerns. Hammond said China added “over 400 gigawatts to their grid last year” and suggested the U.S. has not matched that pace, leaving energy — not only chips — as a competitive choke point. He also described a pattern of diversion and smuggling of advanced chips through third‑party intermediaries and pointed to pending legislation, including the GAIN AI Act, that would restrict outbound sales and give U.S. companies priority access to limited supplies.
Committee members and witnesses discussed vulnerabilities arising from geographically concentrated chip production. Hammond said the most advanced AI logic chips are produced primarily in Taiwan and that, for those parts, "over 90%" of supply comes from that region. Members raised concerns about the economic and national‑security implications if China were to disrupt Taiwan’s manufacturing capacity.
Energy for AI infrastructure was a recurring theme. Witnesses said U.S. electricity generation and grid modernization will need to keep pace with new data centers; several members asked whether nuclear, small modular reactors or expanded fossil‑fuel production should be prioritized to power the expansion. Hammond said he supports nuclear and noted new reactor construction timelines likely place major builds in the 2030s. Committee members emphasized near‑term measures to upgrade the grid and expand reliable power for compute facilities.
Witnesses also urged stronger enforcement against chip diversion. Hammond described investigations and actions in allied countries but said scale is the problem: ‘‘Once these chips are at the door, how do we know where they're ending up?’’ He referenced proposals such as the Chip Security Act to add location verification and tighter export authorizations.
No formal actions were taken at the hearing. Members asked witnesses for additional briefings and materials and indicated bipartisan interest in linking industrial policy, energy planning and export controls to maintain technological advantage.
Why this matters: Advanced chips, data‑center power needs and secure manufacturing are central to the near‑term trajectory of AI capabilities. Testimony at the hearing linked those technical constraints to broader economic and national‑security policy choices.
