Title page 1

Contents 6

Disclaimers 3

Abstract 4

Acknowledgements 5

Executive summary 8

1. Introduction 9

2. Overview of the AI supply chain 10

2.1. Overview of the AI supply chain and the importance of compute 10

2.2. Importance of Integrated circuits (chips) 11

2.3. Overview of the chip supply chain 12

2.3.1. Suppliers of chips used in AI 14

2.3.2. Manufacturers of chips used in AI 15

2.3.3. Suppliers of key of inputs into AI chip production 16

2.4. Data centres, cloud computing and other inputs 17

2.4.1. Data centres and cloud computing 17

2.4.2. Connectivity services and infrastructures, also referred to as "digital infrastructure" 19

2.4.3. Access to energy and water for data centres 20

3. Market features in AI infrastructure 22

3.1. High levels of innovation and intellectual property 22

3.2. High concentration and barriers to entry 23

3.3. Vertical and conglomerate relations 25

3.4. Partnerships and minority shareholdings 27

3.5. Switching barriers 29

3.6. Supply shortages/bottlenecks 30

3.7. Increasing state intervention 30

4. Potential competition policy responses in AI infrastructure 33

4.1. Competition enforcement 33

4.1.1. Anticompetitive agreements 33

4.1.2. Anticompetitive unilateral conduct 35

4.2. Merger control 37

4.3. Market studies 39

4.4. Advocacy and co-operation 41

4.4.1. Advocacy with market participants 41

4.4.2. Advocating with other parts of government 41

4.4.3. Co-operation 41

4.5. Potential regulation 42

5. Conclusion 44

References 45

Notes 58

Tables 7

Table 1. Examples of a concentrated supply chain 24

Figures 7

Figure 1. AI infrastructure supply chain diagram 11

Figure 2. Layers of the chip supply chain 13

Figure 3. Diagram highlighting the different participants and inputs linked to data centres 17

Figure 4. Diagram of Google Durant submarine cable project and related infrastructure 20

Figure 5. Spend on research and development, example key firms in the chip ecosystem, 2015-2024 22

Figure 6. Case studies of vertical integration in AI infrastructure supply chain 26

Figure 7. Reported agreements in AI infrastructure between September and October 2025 28

Boxes 7

Box 1. Key types of chips used in AI explained 12

Box 2. Role of software in GPU market 14

Box 3. Examples of OECD government investments and AI infrastructure partnerships 31

Box 4. US FTC review of partnership agreements 34

Box 5. The DRAM Cartel 35

Box 6. Intel rebates case 37

Box 7. Recent examples of non-horizontal merger investigations in AI infrastructure 38