IBM Warns: U.S. Chip Dependence on Foreign Supply Poses Critical National Security Risk

Silicon sovereignty slips through America's fingers as tech giant sounds alarm.

Supply Chain Shockwaves

IBM's warning hits like a sledgehammer—decades of offshoring semiconductor production now threatens national stability. The very chips powering defense systems, critical infrastructure, and financial networks dangle on fragile foreign threads.

Geopolitical Gambles

Trade tensions escalate into strategic vulnerabilities. Single-region manufacturing concentrations create perfect storm scenarios where geopolitical squabbles could paralyze entire industries overnight.

Financial Fallout

Wall Street's obsession with quarterly margins just collided with reality—apparently saving pennies on chip procurement doesn't look so smart when national security gets auctioned off to the lowest bidder.

Wake-up call echoes through empty fabrication plants. Either America reinvests in domestic silicon or accepts permanent dependence on overseas rivals. The chips are down—literally.

U.S. government invests in Intel while Big Tech signs global AI chip deal

In late August, the U.S. government agreed to put $8.9 billion into Intel, getting a 9.9% ownership in return. This MOVE was meant to boost domestic chip production, especially since the global market is becoming more competitive.

Cohn called the Nvidia-Intel partnership “some good,” but said the real issue is much bigger: America needs to build its own chip infrastructure and stop waiting on imports.

He brought up how badly the country struggled during the COVID pandemic. “We understood that without chips being imported to the United States, our economy, our manufacturing economy [would] shut down,” he said.

That situation exposed a national weakness. Now, the federal government is using policies like the CHIPS Act, signed into law in 2022 under President Biden, to encourage more chip factories at home.

But Cohn made it clear that the government’s job isn’t to pick favorites. “To be able to defend ourselves, to be able to build military equipment, we need to be in the chip manufacturing business here,” he said.

This comes while the U.S. and UK signed a $42 billion agreement called the Tech Prosperity Deal, which is expected to boost AI chip demand in the UK. Microsoft, Google, Nvidia, and OpenAI are all involved.

Cohn also said the AI boom will need massive data centers, most of which still don’t exist. He expects them to be ready in three to five years. He’s convinced AI is just getting started. Tools like AI agents only “solve a specific AI problem” today, but that will change. IBM is preparing for that next step.

The company believes AI will expand into something much bigger, connected systems, working together, powered by quantum computing. “Where I believe this is going, where IBM believes is going … to an enterprise-wide solution where all of these AI programs … will work together,” he said.

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