How will the tariff imbroglio impact data center development in the US, which relies heavily on imported components? Cool Vector convened a panel of experts, including the CFO of a major data center company, to compare notes on supply chain disruptions, critical equipment and what happens to compute demand in economic downturns.

This episode of Cool Vector Hot Takes features a lively conversation between John Wilson, CFO of ⁠Sabey Data Centers⁠, Philbert Shih, Founder of ⁠Structure Research⁠, Nabeel Mahmood of ⁠Nomad Futurist Foundation⁠, and Phillip Koblence of Critical Ventures and ⁠Nomad Futurist.⁠

Among the key takeaways of the data center supply chain conversation:

• Uninterruptible Power Supply (UPS) systems and edge data centers (EDCs) are among the most critical components manufactured outside the US that are worrying data center operators. In addition, says says John Wilson of Sabey Data Centers, “If I think up and down the supply chain, it’s the transformers, it’s the GPUs and the CPUs that I would put right at the top of that criticality list."

• The power grid could become the most worrisome bottleneck in the data center supply chain. “Electricity production, and the impact that has on our ability to service the demand, is incredibly complex,” says Wilson.

• The global nature of the data center supply chain can create “cascading” delays from even small disruptions. “If the customer doesn’t have chips, doesn’t have servers, doesn’t have cables, they’re not going to be able to set up their infrastructure,” warned Philbert Shih of Structure Research.

• Multi-tenant data centers may have greater pricing flexibility to pass along cost increases—compared to single-tenant hyperscale facilities — because they operate with shorter contract durations and serve a diversified customer base with varying margin sensitivities and renewal cycles, notes Phillip Koblence.

• New data center development may accelerate outside of the US as operators hedge against geopolitical and supply chain volatility. “We’re seeing a massive boom in the Middle East, in Africa, in Australasia. We’ve got to understand that the days of just focusing on North America or Europe are gone,” says Nabeel Mahmood.

• Even enormous budgets can’t override the need for planning, patience, and trusted vendors.
Says Wilson:  ”This isn't stuff where, even if you're throwing multiple billions of dollars at it, you can solve in an instant,” says Wilson. “It takes time to recreate the supply chains. It takes time to reshore manufacturing, if that's really gonna be the long term solution. These aren't problems that are easily solved in a moment. It takes careful planning. It takes work to find alternatives, and it takes patience.”

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