Will Mounting Supply Chain Strains Hamstring the AI Investment Boom?

Hunter Clark, Jeffrey Dawson and Shad Turney

No 20260511, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The conflict in the Middle East has precipitated a global supply shock—the third in six years following the pandemic in 2020 and Russia’s invasion of Ukraine in 2022. The current shock raises the specter of spillovers to the U.S. through both prices and physical shortages of goods. A critical conduit for spillovers through these channels is via Asian supply chains, especially from middle- to lower-middle income countries in southeast Asia, which are key suppliers for goods needed for the AI infrastructure build-out in the U.S. These countries are also heavily reliant on Middle East energy imports. This post examines key factors related to these Asian supply chain vulnerabilities.

Keywords: Asia; supply chain (search for similar items in EconPapers)
JEL-codes: F00 (search for similar items in EconPapers)
Date: 2026-05-11
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DOI: 10.59576/lse.20260511

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