July 14, 2025 Domestic Supply Chain Fuels AI Competitiveness

America’s AI leadership depends on resilient supply chains. When global disruptions hit, domestic sourcing becomes our competitive edge.

By Matt Cruce, COO, Accelsius

Lessons From The Flood

I was a commodity manager for hard drives at Dell in 2011 when the devastating floods in Thailand submerged industrial parks outside Bangkok under 60 feet of water. Overnight, 30% of the world’s hard drive supply vanished. While competitors scrambled, our team mobilized immediately with a clear objective: to secure our share of the remaining 70 million drives, as our company needed 10 million per quarter.

This crisis taught me a lesson I’ve carried throughout my career: you can’t predict every disruption, but when disruption inevitably occurs, your relative position against competitors is what truly matters.

Today, as the United States races to build AI infrastructure to compete globally, this principle is more vital than ever. The bottleneck for AI deployment isn’t just chips—it’s the entire technology stack, including critical cooling systems that enable dense compute environments to function reliably. And while many focus on the algorithmic race, the physical infrastructure battle may ultimately determine who wins the AI race.

The Shift from Cost to Resilience

For decades, supply chain strategy prioritized cost optimization above all else, driving manufacturing offshore in pursuit of lower labor costs. But recent years have revealed the vulnerability of this approach. From pandemic shutdowns to tariff fluctuations, from port congestion to geopolitical tensions—global supply chains optimized solely for cost have repeatedly buckled under pressure.

In the specialized world of AI infrastructure, these vulnerabilities become exponentially more significant. When components for critical systems, such as direct-to-chip liquid cooling, are primarily manufactured overseas, every disruption creates cascading delays that directly impact America’s ability to deploy AI capabilities at scale.

When building supply chains for advanced cooling technologies, companies face a critical choice: chase immediate cost savings through offshoring or build resilience through domestic sourcing. The latter approach, while potentially more expensive in the short term, creates inherent resilience against inevitable disruptions, whether they’re tariffs, natural disasters, or geopolitical tensions.

Companies that source 90% or more of their components from North America can minimize exposure to international disruptions without sacrificing quality or long-term profitability. This geographic strategy becomes particularly powerful for specialized manufacturing capabilities that are rare in North America, such as metal fin skiving technology—a critical process for high-performance cooling solutions, for which there were fewer than five machines in North America just a few years ago.

Three Pillars of a Responsive Supply Chain

Building true supply chain resilience requires more than geographic strategy. Through my experience building supply chains at both enterprise scale and from scratch at a startup, I’ve identified three critical pillars that create genuine responsiveness:

1. Geographic Strategy with Purpose

Proximity to both customers and innovation centers matters. Domestic sourcing minimizes transportation time, reduces greenhouse gas emissions, and shields operations from international shipping disruptions.

More importantly, securing rare manufacturing capabilities on American soil creates strategic advantages. Companies that establish relationships with vendors who operate specialized equipment domestically gain access to manufacturing capabilities that competitors simply cannot match, particularly during disruptions.

This geographic strategy isn’t just about avoiding disruptions—it’s about creating response speed that becomes a competitive advantage. When market needs shift, domestically centered supply chains can adapt with the agility that globally distributed networks simply cannot match.

2. Scaling Without Sacrificing Control

No resilient supply chain can succeed by choosing either in-house manufacturing or outsourcing. The key lies in striking a strategic balance between them.

Leading companies maintain core manufacturing in-house to ensure quality control, maintain innovative capacity, and possess deep product knowledge. This creates inherent resilience—understanding products at a fundamental level allows for quick adaptation when needed.

Simultaneously, partnerships with contract manufacturers enable scaling to hyperscaler volumes when needed. This dual approach creates a supply chain that maintains quality while scaling flexibly to meet market demand.

This balanced approach is particularly crucial for advanced cooling technologies. The complexity of these systems demands manufacturing precision that can only come from deep product knowledge, yet the scale of potential AI infrastructure deployments requires production capacity beyond what any single manufacturer could reasonably develop in-house.

3. Operational Excellence Through Structured Process

Resilience ultimately depends on execution, which is why successful supply chains operate around five fundamental tenets:

1. Hold yourself and others accountable: Begin with your own house in order before expecting accountability from partners
2. Find solutions, not barriers: Train teams to stretch their thinking until viable options emerge
3. Maintain appropriate urgency: Not every problem requires the same response; prioritize effectively
4. Raise issues the right way: Create clear pathways for problem escalation that match your organization
5. Be proactive: Look around corners to anticipate issues before they manifest

These tenets aren’t just wall decorations—they must be active principles discussed and applied daily. They create a framework for situational judgment that allows teams to navigate complexity with consistency.

Underpinning this operational approach is rigorous data management. Without a single source of truth for critical data, even the most well-designed processes will falter. By establishing clear ownership of data sources and limiting the systems where that information lives, organizations create a foundation for decision-making that eliminates the confusion plaguing many larger enterprises.

The National Security Dimension

Beyond operational advantages, domestic supply chains for critical AI infrastructure components represent a strategic national security imperative. As AI becomes increasingly central to economic prosperity and defense capabilities, dependence on foreign supply chains creates vulnerabilities that extend beyond business disruption.

Direct-to-chip liquid cooling isn’t merely a component—it’s the enabling technology that allows next-generation AI systems to function at all. Without effective cooling, the densely packed processors that power sophisticated AI models simply cannot operate reliably. By securing domestic manufacturing capabilities for this critical infrastructure, American companies contribute to the nation’s technological sovereignty.

This perspective requires shifting our perspective on manufacturing strategy. Rather than viewing domestic production solely through a cost lens, business and policy leaders must recognize it as an investment in national resilience and competitive positioning.

Actionable Lessons for Technology Leaders

Building resilient supply chains isn’t just for manufacturers. Every technology leader can apply these principles to strengthen their organization’s position:

1. Assess your current vulnerability: Map your critical dependencies and identify single points of failure, particularly those that cross international borders or rely on specialized capabilities with limited availability.
2. Build redundancy strategically: Don’t just duplicate existing suppliers; seek partners with fundamentally different risk profiles to create true resilience.
3. Develop organizational capacity for adaptation: Create operational frameworks that enable your team to make consistent judgments in the event of disruption.
4. Value responsiveness appropriately: When calculating total cost of ownership, factor in the business impact of delayed deployments and missed market opportunities that occur when supply chains fail.
5. Think beyond immediate suppliers: The true vulnerability often lies several tiers deep in your supply chain; work with partners to understand these deeper dependencies.

The Future is Responsive

The race for AI dominance will ultimately be determined not just by algorithmic innovation but by our ability to physically deploy that intelligence at scale. As cooling infrastructure becomes the critical enabler for next-generation AI deployments, the resilience of these supply chains becomes a strategic advantage.

By building responsive, primarily domestic supply chains for critical infrastructure components, companies create a competitive advantage for American technology leadership. The organizations and nations that master this challenge—balancing innovation, cost, and resilience—will ultimately prevail in the global AI race.

About the Author:
Matt Cruce is an expert in high-tech supply chain management, including procurement and strategy. He has 12 years of experience at Dell Technologies, where he led Supply Chain Planning for servers. He also has engineering experience with NASA’s Orion Program at Lockheed Martin. Matt earned a B.S. in Aerospace Engineering from the University of Illinois at Urbana-Champaign.

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