Government leaders, we need to have a serious conversation about a reality that isn’t showing up in your acquisition plans yet: AI is now the gatekeeper of hardware. It is starting to dictate who actually gets equipment and who gets stuck at the back of the line.

For the last year, everyone’s been obsessed with GPUs. But after talking to the people actually building the hardware and the infrastructure, it’s clear the problem has mutated.

The bottleneck isn't just one chip anymore. It’s the entire stack.

Every single component—servers, storage, networking, memory, and semiconductors—is being swallowed up by unprecedented AI demand. While government agencies are stuck in slow-motion procurement cycles, hyperscalers (Big Tech) are playing a different game. They are locking in production capacity years in advance, effectively stripping the shelves bare before a government RFP even hits the street.

The Math is Getting Ugly

This isn’t "temporary volatility." It’s basic economics, and the signals coming from vendors are incredibly blunt:

• Price hikes: We’re seeing ~20% increases right now.
• The 2026 Cliff: We’re looking at 30% cost surges by next year.
• Lead times: Delivery dates are blowing past traditional acquisition windows.
• Rigidity: If you want a custom configuration, forget it. You take what’s on the line, or you wait.

The Mission Risk Nobody is Talking About

Our acquisition models were built for a predictable world. Predictable supply, predictable pricing, predictable delivery. That world is gone.

Here’s the part that should keep you up at night: every single modernization effort—from cybersecurity and data platforms to basic communications—depends on this hardware. When the supply chain chokes, it doesn't just delay a project; it becomes a mission risk. The organizations that are surviving this aren't waiting for "things to get back to normal." They are already changing their approach:

• Buying earlier than their normal cycles ever allowed.
• Building flexibility into requirements so a single missing component doesn't kill a program.
• Updating budgets now, because a mid-program price jump in 2026 will be a "program killer."
• Treating vendors as intelligence sources, not just contractors.

The Bottom Line

The CHIPS Act is great, but we’re talking about years for those fabs to come online, not quarters. We don't have that kind of time.

AI isn’t just changing how the government works; it’s changing whether you can even get the tools to do the work. If you think your FY planning is safe because you haven't seen the "allocation" warnings yet, you’re already behind.