As of late December 2025, a critical national security and technology concern has come into sharp focus: both Silicon Valley’s leading AI companies and the U.S. Department of Defense are heavily dependent on Chinese lithium-ion batteries. While policymakers and executives have spent years “de-risking” semiconductor supply chains, energy storage has quietly emerged as a far more dangerous bottleneck.
One Dependency, Two Powerhouses
The technologies may differ, but the underlying reliance is the same.
For AI giants such as Google, Microsoft, and Meta, massive data centers now form the backbone of artificial intelligence development. These facilities require gigawatt-scale energy storage systems (ESS) to stabilize power loads, replace diesel backup generators, and prevent subtle voltage fluctuations that can cause silent data corruption during AI training.
At the same time, the Pentagon has shifted toward battery-dependent warfare. Modern defense systems rely on millions of lithium-ion batteries to power drones, electronic warfare platforms, and emerging high-energy laser weapons. Without secure access to batteries, both AI infrastructure and military readiness are at risk.
Three Critical Vulnerabilities
Recent defense and industry reports from 2024 and 2025, including analysis by Govini, reveal the depth of the problem.
First is a supply-chain stranglehold. The U.S. military depends on Chinese-linked supply chains for roughly 6,000 battery-related components across its weapons systems. Experts estimate that foreign-sourced parts appear in virtually 100% of active U.S. military platforms.
Second is the weaponization of supply chains. China has already shown it is willing to use this leverage. In late 2024, Beijing sanctioned the battery supplier of U.S. drone maker Skydio, nearly halting production almost overnight.
Third is technological leadership. Unlike semiconductors where the U.S. still leads China dominates battery chemistry, manufacturing scale, and cost efficiency. Analysts from Stanford’s Hoover Institution warn that China leads in “almost every industrial component” of the battery ecosystem.
Government and Tech Pushback
Washington is moving quickly, but the solutions are long-term. Under the National Defense Authorization Act, the Pentagon will be barred from buying batteries from major Chinese firms such as CATL and BYD starting in October 2027.
The federal government has also launched an “energy dominance” strategy, allocating more than $500 million toward battery recycling, mineral extraction, and domestic manufacturing to reduce reliance on Chinese mining and processing.
Meanwhile, Big Tech is taking matters into its own hands. Alphabet’s $4.75 billion acquisition of Intersect Power in December 2025 allows Google to pair its data centers with proprietary wind, solar, and battery storage systems, reducing exposure to public grids and foreign suppliers.
The Time Trap
The core dilemma is speed. Analysts estimate the U.S. needs at least five years to build domestic capacity for the battery types such as LFP cells used by AI data centers and military drones. Until then, both American AI leadership and national defense remain deeply tied to Chinese manufacturing.
