Key points
- Willy Shih is a professor of management practice at Harvard Business School and author of a new book on supply chain economics.
- The Verge reported that Shih discusses how the AI sector is consuming vast computing resources during a period of unprecedented infrastructure development.
- Shih notes that politicians and regulators frequently ignore the underlying economics of these complex global systems.
Harvard Business School professor Willy Shih argues that the rapid expansion of artificial intelligence infrastructure intersects with deep-seated global supply chain economics. According to The Verge, Shih’s new book, Where Does My Stuff Come From?reportedShih explains that the physical hardware needed for AI growth depends on global manufacturing networks that are currently unstable and politically influenced.The Verge reports that Shih attributes the current manufacturing difficulties to a disconnect between AI’s resource consumption and the structural economics of global supply chains. The Powerful Economics Behind Global Supply Chains, explores these complex systems.
The evidence
The Verge reported that Shih, an economist and professor of management practice, discusses the hidden costs within the current AI boom.reported The outlet noted that Shih previously predicted the failure of Foxconn’s Wisconsin LCD plant in 2019 because the supporting supply chain was absent.reported He also analysed the pandemic-era chip shortage in 2021.
The decision
Shih observes that the manufacturing sector is currently facing significant difficulties amid political debates about the future of globalization. The Verge stated that tariffs introduced by Donald Trump continue to change, creating uncertainty. Factories intended to reshore to the United States have largely not appeared, according to the report.reported
The takeaway
The Verge described the current situation as a manufacturing mess where AI is devouring the planet’s computing resources. This consumption happens during an unprecedented infrastructure buildout, Shih noted. The outlet reported that politicians and regulators seem to insistently ignore the economics underlying these complex systems.reported
Building on this
Developers building on AI infrastructure must account for the physical constraints of global supply chains. Shih’s analysis suggests that the rapid deployment of compute resources relies on manufacturing networks that are fragile and politically contested. The lack of reshored factories means that hardware availability remains tied to existing global production hubs.
Why it matters
- Enterprise IT buyers must recognize that AI compute growth is constrained by physical supply chain limitations, not just software or cloud availability.
- The absence of reshored manufacturing capacity in the US means hardware procurement strategies must remain flexible regarding global sourcing.
- Political instability, including changing tariffs, introduces unpredictable variables into the long-term planning for AI infrastructure investments.
- Understanding the economic factors behind China’s manufacturing dominance is essential for assessing risk in global hardware supply chains.
Topics: supply chain, AI infrastructure, Willy Shih, manufacturing, global economics
Updated
Then / now / next
Shih analysed the 2019 Foxconn Wisconsin LCD plant proposal and the 2021 chip shortage, identifying supply chain gaps.
The Verge reports that AI infrastructure is expanding rapidly while reshoring efforts fail and tariffs fluctuate.
The release of Shih’s new book will provide further details on the economics behind these global supply chain complexities.
Story timeline
- Then Shih analysed the 2019 Foxconn Wisconsin LCD plant proposal and the 2021 chip shortage, identifying supply chain gaps.
- 05 Nov 2026 The hidden supply chain costs of the AI boom
- Now The Verge reports that AI infrastructure is expanding rapidly while reshoring efforts fail and tariffs fluctuate.
- Next The release of Shih’s new book will provide further details on the economics behind these global supply chain complexities.
For readers
Business
- Shih highlights that reshoring factories have mostly not materialized, complicating domestic supply chain strategies.
- The Verge reports that changing tariffs and political fights over globalization create an uncertain manufacturing environment.
Investors
- AI infrastructure buildout is described as an unprecedented event that is devouring global computing resources.
- Shih argues that the economics behind these complex systems are frequently ignored by regulators and politicians.
Policy
- Politicians and regulators are noted to insistently ignore the powerful economics underlying global supply chains.
- The failure of previous projects, like the Foxconn LCD fab, illustrates the difficulty of establishing new manufacturing hubs without existing supply chains.
Ask the article
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Your choice stays on this device. No public tally.Questions readers ask
What is Willy Shih's new book about?
The book is titled Where Does My Stuff Come From? The Powerful Economics Behind Global Supply Chains and focuses on the economics of global manufacturing.
Did Shih predict the outcome of the Foxconn Wisconsin project?
Yes, The Verge reported that Shih correctly predicted the failure of the project because the necessary supply chain support was not in place.
What does Shih say about current AI infrastructure trends?
He notes that AI is consuming vast amounts of computing resources during an unprecedented buildout, while politicians ignore the underlying supply chain economics.
Connected stories
Reading receipt
- Willy Shih is a professor of management practice at Harvard Business School and author of a new book on supply chain economics.
- The Verge reported that Shih discusses how the AI sector is consuming vast computing resources during a period of unprecedented infrastructure development.
- Shih notes that politicians and regulators frequently ignore the underlying economics of these complex global systems.
Still open: What specific economic mechanisms does Shih detail in his book to explain why China remains a manufacturing powerhouse?
Still open: How might the changing tariffs specifically impact the timeline for AI infrastructure deployment in the US?