The dependency runs the other way

Eunice Yoon reported on Saturday that Chinese manufacturers are eyeing the American data-centre build-out as a market. The company she found is worth naming, because the structure is the story. Brightray is registered in Singapore, manages construction, and has a single manufacturer: a Chinese firm called PrefabDC, whose factory is in Yangzhou. "We can see very big potential in the U.S. market," its global vice-president S.K. Lee told CNBC. Prefabricated construction is used in America already, but for modules inside a shell; Brightray supplies the shell too, and says it can halve a build that normally runs two to three years.

Start with why the demand is here rather than there, because the framing gets it backwards. Stanford's AI index counted 5,427 AI data centres in the United States in 2025 against 449 in China. Four American companies are expected to spend around $765bn on AI infrastructure this year, and Jamie Dimon puts next year at a trillion; Beijing's plan is $295bn over five years. Jeffrey Ding of George Washington University gives the reason without decoration: Chinese companies "are not generating as much revenues from their AI services", and underneath that, "there is not as much demand for the AI services". China is not losing a build-out race. It is not having one, and its manufacturers would like to sell into someone else's.

So: can they? The reflex answer is CFIUS, and the reflex is wrong twice over. The Committee reviews investments and certain real-estate purchases; a Chinese factory selling steel modules to an American owner is not a covered transaction, because nobody acquires an interest in anything. And even if someone were, the list matters. Appendix A to 31 CFR part 800, which enumerates covered investment critical infrastructure, contains the phrase "data center" exactly once, at item (v): "Any data center that is collocated at a submarine cable landing point, landing station, or termination station." An inland campus in west Texas is not on it. The items that would bite are (xi) and (xii) — the bulk-power system and electric storage physically connected to it — and they bite on ownership, not on supply.

The instrument that does reach an import is the one nobody names. Under 15 CFR part 791, made under Executive Order 13873, an ICTS Transaction is "any acquisition, importation, transfer, installation, dealing in, or use" of technology "primarily intended to fulfil or enable the function of information or data processing, storage, retrieval, or communication". The Secretary of Commerce determined in 2021 that China is a foreign adversary for those purposes, and the rule reaches "any corporation, partnership, association, or other organization, wherever organized or doing business, that is owned or controlled by a foreign adversary" — so a Singapore certificate of incorporation is not, on the face of the regulation, an exit.

What part 791 does not have is a filing requirement. No notification, no threshold, no clock. The Secretary evaluates transactions "on a case-by-case basis", issues an Initial Determination, takes the parties' response, then prohibits, permits, or permits with mitigation. Nobody has to tell Commerce that a container of Yangzhou-built data hall is on a ship. CNBC reports the administration is considering bans on Chinese open-weight models and on new categories of Chinese data-centre components. Considering is the right word: that would be a rulemaking, and there is not one.

Now the direction that makes this interesting. American export control is an outbound regime, and it has worked. Nvidia's guidance assumes no China data-centre revenue at all; its filing for the quarter to 26 July records Hopper shipments to China at less than 1 per cent of data-centre revenue, and shipments under the H200 licensing programme at less than 1 per cent as well. The United States has removed itself as a seller of accelerators to China with considerable success.

It has built nothing symmetrical on the other side of the ledger, and the other side is where the constraint is. Benjamin Boucher, who covers supply chains for Wood Mackenzie, told CNBC that the United States is short of key components, particularly electrical equipment, "doesn't have a lot of what it needs domestically", and faces long lead times where China "can offer those at a much more favorable timing". His summary is the sentence to keep: "China is definitely very important towards the U.S. supply chain for data centers at the moment." Transformers, batteries, fibre-optic cable. The binding constraint on the build-out is the wire and the turbine, not the silicon — and the wire is exactly what is being offered.

A smaller version of the same blind spot exists inside the industry. Anthropic's newest model declines kernel work for certain machine-learning accelerators, a restriction keyed to the hardware a question is about rather than to who is asking, which is why testers found it catching Amazon's silicon alongside Huawei's. A classifier cannot see the person; an outbound control regime cannot see the thing coming in. A Singapore-registered intermediary with one Chinese factory sits in the gap.

None of which settles whether the modules should be allowed. The security argument against them is specific: a prefabricated hall arrives with its power distribution, cooling controls and building management installed by the supplier, and the supplier then operates, maintains, updates and services it — the exact conduct part 791 treats as making technology foreign-adversary technology whatever the invoice says. The point here is narrower. Washington has built an elaborate apparatus for deciding what American compute may leave the country, and has none, and no pending rule, for deciding what foreign electrical plant may come in to power it. On the published regulations, the dependency that is load-bearing runs towards the United States.