US Data Center Spending Hits Record $40B on AI Demand Surge

U.S. data center construction spending surged to a record $40 billion annualized rate in June 2025, marking a roughly 30-40% increase from the prior year, driven primarily by the rapid expansion of artificial intelligence (AI) infrastructure. Major technology companies, including Microsoft, Google, Amazon, Meta, Apple, and Oracle, are investing billions to support growing AI and machine learning workloads, with Bank of America estimating combined AI infrastructure spending could reach $385 billion annually between 2025 and 2028. This boom has accelerated construction in key states like Virginia and Texas, where tax incentives and access to reliable power encourage development, while also benefiting semiconductor suppliers such as Nvidia, whose chips are critical for AI processing. However, the rapid growth of data centers is raising concerns about increased demands on power grids and water supplies, as the energy consumption of these facilities contributes to broader electricity demand alongside other sectors like electric vehicles and industrial reshoring. Analysts emphasize that while hyperscale cloud providers are major drivers of this growth, other factors will also significantly increase U.S. electricity demand through 2030. The expanding AI-driven data center infrastructure is reshaping the U.S. technological and industrial landscape, reflecting a fundamental shift in computing and data storage needs.