US Data Center Construction Hits Record $40 Billion as AI Demand Surges
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US data center build hits record as AI demand surges, Bank of America Institute says
Sept 10 (Reuters) - Construction spending on U.S. data centers reached an all-time high of $40 billion at a seasonally adjusted annual rate in June, as technology giants continue pouring billions into AI infrastructure, according to a Bank of America Institute report. BY THE NUMBERS The June figure represents a 30% increase from the previous year, following a 50% surge in 2024, the report said, citing U.S. Census Bureau data. WHY IT'S IMPORTANT The boom in generative AI and machine learning is fueling demand for computing power, prompting tech heavyweights including Microsoft (MSFT.O), opens new tab, Alphabet (GOOGL.O), opens new tab and Amazon.com (AMZN.O), opens new tab investing billions in setting up the infrastructure. These hyperscalers have been spending billions to scale their operations to support AI workloads, creating a windfall for semiconductor companies like Nvidia (NVDA.O), opens new tab, which supplies chips used in data centers and derives the bulk of its revenue from such sales. KEY QUOTES "Hyperscalers are a big part of the increased demand for power, but they're not the whole picture," Bank of America Institute economists led by Liz Everett Krisberg said in the report. "In fact, most of the expected rise in U.S. electricity demand through 2030 is coming from things like electric vehicles (EVs), heating, industrial reshoring, and electrifying buildings." Reporting by Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab
[2]
US data center build hits record as AI demand surges, Bank of America Institute says
(Reuters) -Construction spending on U.S. data centers reached an all-time high of $40 billion at a seasonally adjusted annual rate in June, as technology giants continue pouring billions into AI infrastructure, according to a Bank of America Institute report. BY THE NUMBERS The June figure represents a 30% increase from the previous year, following a 50% surge in 2024, the report said, citing U.S. Census Bureau data. WHY IT'S IMPORTANT The boom in generative AI and machine learning is fueling demand for computing power, prompting tech heavyweights including Microsoft, Alphabet and Amazon.com investing billions in setting up the infrastructure. These hyperscalers have been spending billions to scale their operations to support AI workloads, creating a windfall for semiconductor companies like Nvidia , which supplies chips used in data centers and derives the bulk of its revenue from such sales. KEY QUOTES "Hyperscalers are a big part of the increased demand for power, but they're not the whole picture," Bank of America Institute economists led by Liz Everett Krisberg said in the report. "In fact, most of the expected rise in U.S. electricity demand through 2030 is coming from things like electric vehicles (EVs), heating, industrial reshoring, and electrifying buildings." (Reporting by Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid)
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Construction spending on U.S. data centers reached an all-time high of $40 billion in June, driven by tech giants' investments in AI infrastructure. The surge reflects the growing demand for computing power in the AI era.
Record-Breaking Data Center Construction
The United States is witnessing an unprecedented surge in data center construction, with spending reaching a record-breaking $40 billion at a seasonally adjusted annual rate in June. This remarkable figure, reported by the Bank of America Institute, represents a 30% increase from the previous year, following an even more impressive 50% surge in 2024
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.AI Boom Driving Demand
The primary catalyst behind this extraordinary growth is the booming demand for artificial intelligence (AI) and machine learning technologies. As these cutting-edge fields continue to evolve and expand, they are fueling an insatiable need for computing power. This demand has prompted tech giants to invest heavily in AI infrastructure, with companies like Microsoft, Alphabet, and Amazon.com pouring billions into setting up and expanding their data center capabilities
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.Hyperscalers and the AI Infrastructure Race
These tech behemoths, often referred to as 'hyperscalers', are engaged in a fierce competition to scale their operations and support the growing AI workloads. Their massive investments are not only reshaping the data center landscape but also creating a significant windfall for semiconductor companies. Nvidia, in particular, has emerged as a major beneficiary of this trend, as it supplies the specialized chips used in data centers and derives the bulk of its revenue from such sales
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.Related Stories
Beyond AI: A Broader Picture of Power Demand
While the focus has been on AI-driven demand, Bank of America Institute economists, led by Liz Everett Krisberg, emphasize that hyperscalers are just one piece of the puzzle. According to their report, the expected rise in U.S. electricity demand through 2030 is not solely attributed to data centers. A significant portion of this increase is expected to come from other sectors, including electric vehicles (EVs), heating, industrial reshoring, and the electrification of buildings
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.Implications for the Future
The record-breaking investment in data center construction and the broader trends in power demand signal a transformative period for the U.S. technology and energy sectors. As AI continues to evolve and permeate various industries, the need for robust digital infrastructure is likely to grow further. This surge in data center construction and the associated demand for advanced semiconductors could have far-reaching implications for the U.S. economy, potentially driving innovation, job creation, and technological advancements in the years to come.
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