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The US is facing a critical dependency on China for battery technology essential for AI and military applications, highlighted by the ongoing war in Ukraine. Major American companies are investing heavily in lithium-ion batteries to support data centers, which consume vast amounts of energy.

The Pentagon warns that modern warfare increasingly relies on batteries for drones and advanced weaponry, with approximately 6,000 battery components sourced from China for US military programs. Despite efforts to develop an independent battery industry, experts note the significant challenges due to China's dominance in lithium iron phosphate batteries, which accounted for 99% of global production in 2024.

The US government has begun reallocating federal grants to bolster local battery production, recognizing the strategic importance of energy infrastructure for national security and AI competition. However, experts warn that breaking free from Chinese supply chains will be difficult and require substantial investment.