Data centers are unpopular — and a key motor of economic growth
Summary
Data center construction and other AI spending have become a significant source of U.S. investment and economic growth. Analysts expect political opposition and questions about AI’s future profits to slow some projects, which could reduce growth, stock-market wealth and consumer spending.Key Facts
- Federal Reserve researchers estimated that spending on data centers, power facilities and other AI-related equipment accounted for about 20% of U.S. GDP over the preceding year.
- Capital Economics projected that spending by Alphabet, Amazon, Meta and Microsoft would reach about $800 billion in 2026 and $1 trillion in 2027.
- Analysts said Democratic midterm election wins could slow data center development and raise its costs, but are unlikely to stop investment altogether.
- Capital Economics economist Stephen Brown said the expected revenue needed to justify sustained AI investment—about $2 trillion for major AI companies by the early 2030s—seems unlikely.
- Capital Economics estimated that AI investment added about 0.3 percentage points to real GDP growth in 2025 and expected a similar contribution in 2026.
- Capital Economics estimated that a 10% annual decline in AI spending from current levels would reduce GDP growth by about 0.1 percentage points.
- Economists said a slowdown in data center construction could weaken stock prices and the wealth-driven consumer spending of investors who hold AI stocks.
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