The massive build-out of artificial intelligence infrastructure is rapidly becoming one of the largest investment waves in US economic history, creating jobs and wealth while putting pressure on electricity supplies, construction costs, consumer prices and financial markets.
Spending on data centers and related AI infrastructure is projected to reach $10.3 trillion between 2025 and 2032, according to estimates by economist Stijn van Nieuwerburgh published by the Brookings Institution. The figure would amount to an average of 3.6% of US gross domestic product each year.
The scale of the investment is unprecedented in the modern US economy and is already reshaping industries far beyond technology. At the same time, economists and policymakers are increasingly focused on the risks created by the enormous amounts of capital being committed to an industry whose future revenues remain uncertain.
Goldman Sachs estimates that AI investment could equal 1.9% of US GDP in 2026, a level not seen since the late-19th-century railroad expansion, when investment in a single emerging industry represented an even larger share of economic output.
Data centers become a rare bright spot for construction
The AI boom has provided an important source of demand for the US construction sector at a time when other areas of private construction have weakened.
Private spending on data-center construction reached a seasonally adjusted $37 billion during the first seven months of the year, around $9 billion more than during the same period a year earlier, according to Commerce Department data.
By contrast, spending on other forms of private construction, including housing, apartment buildings and retail facilities, was about $46 billion below year-earlier levels during the same period.
The concentration of investment is also creating competition for resources. Data centers require enormous amounts of electricity and skilled labor, forcing some other industries to compete for access to both.
In Mississippi, for example, plans for an aluminum smelter reportedly lost out after a nearby data center development claimed electricity capacity that would have been needed by the industrial project. The smelter ultimately chose Oklahoma.
Land prices are also rising in areas attracting large-scale data-center projects, adding to pressure on traditional manufacturing.
“It’s crowding out manufacturing,” said Didi Caldwell, a site-selection consultant who works with heavy industry.
Jobs and wages surge around AI infrastructure
The investment boom is creating demand for workers across both the technology sector and traditional trades.
LinkedIn estimates that AI-related activity contributed to more than 750,000 new US jobs between 2023 and 2026 so far. AI-related job listings carry a median salary of roughly $180,000, compared with about $80,000 across all job listings.
Data scientists, AI engineers and other white-collar positions account for much of the growth, but the infrastructure boom is also creating demand for electricians, construction workers and other skilled trades.
Data centers have added around 117,000 jobs since the beginning of 2024, excluding many temporary construction positions.
In the Washington, DC, area, the number of unionized electricians has nearly doubled in recent years, from about 9,000 to 17,500, according to IBEW Local 26.
Some workers have moved into the sector from other careers. Others are benefiting from long hours and overtime as companies race to complete data centers as quickly as possible.
The boom is spreading into markets beyond technology
The financial impact of AI investment is increasingly visible in asset prices and consumer spending.
US households’ holdings of stocks and mutual funds reached $63 trillion in the second quarter, according to the Federal Reserve, almost twice the level recorded at the end of 2022.
The increase has supported consumer spending despite weaker inflation-adjusted wage growth, although the benefits have been concentrated among wealthier households, which typically hold a larger share of their wealth in financial assets.
The effect is particularly visible in Silicon Valley’s luxury property market. While US home sales have struggled for years, demand from technology executives and investors has helped drive a sharp increase in high-end transactions in the region.
One recently listed five-bedroom property priced at $9.9 million attracted seven offers and went under contract for more than $13 million, with an AI entrepreneur reportedly making the winning bid.
AI infrastructure is also adding to inflation pressures
The investment boom is not without broader economic costs.
Demand for data-center equipment, particularly memory chips and other semiconductors, has contributed to shortages and higher prices. Import prices for computers, peripherals and semiconductors were 20% higher in August than a year earlier.
Those increases are feeding into the prices of some consumer electronics, including smartphones and gaming consoles, adding another source of inflationary pressure.
Electricity costs are also rising in some regions where data-center development is expanding rapidly. The facilities consume vast amounts of power, creating competition between technology companies and other industrial and residential users.
Chicago Federal Reserve President Austan Goolsbee has warned that data-center investment is pushing up wages in some related sectors. Federal Reserve Chair Kevin Warsh has also pointed to borrowing by large technology companies as one factor contributing to higher long-term interest rates, which can make mortgages and homeownership more expensive.
Debt raises questions about the sustainability of the boom
Perhaps the biggest economic risk lies in how much of the AI build-out is being financed.
Capital spending by five major hyperscalers — Alphabet, Amazon, Meta Platforms, Microsoft and Oracle — is expected to reach $4.2 trillion over the four years through 2029, according to FactSet. An increasing portion of that investment is being funded through debt.
Van Nieuwerburgh has warned that technology companies are increasingly using off-balance-sheet entities to raise money from banks and private-credit firms. Because many of these arrangements are not fully visible in public financial disclosures, the scale of the potential risks is difficult to assess.
If AI companies fail to generate sufficient revenue to service the debt accumulated to finance data centers, the consequences could extend well beyond the technology industry and into the wider financial system.
The scale of the investment also makes the US economy increasingly exposed to the success or failure of a single technological bet.
For now, the AI build-out is generating jobs, supporting construction and lifting wealth across parts of the economy. But its growing demands for capital, energy, labor and infrastructure are also creating new pressures — raising the question of how long the boom can continue without producing broader economic strains.
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