Data centers: Unpopular projects may still motor economic growth, experts warn

Spending plans remain substantial

Alphabet, Amazon, Meta and Microsoft are among the companies known as hyperscalers, which are racing to build data centers. Capital Economics expects their spending to double to around $800 billion in 2026 and reach $1 trillion the following year.

Investment is likely to continue in the near term for projects already underway and facilities that have permits. But widespread opposition to data centers could constrain future construction, with consequences for the broader economy.

Analysts see possible slowdown

Capital Economics chief North America economist Stephen Brown said the revenue needed to justify sustained investment would be about $2 trillion for major AI companies by the early 2030s. He said that outcome seems very unlikely.

Brown told CBS News that data center construction may slow, though he does not expect it to stop altogether. He warned that easing investment would have harmful effects on the U.S. economy. Moody’s Analytics chief economist Mark Zandi expects investors to keep funding AI for the next couple of years, while saying its longer-term prospects are less certain.

Growth could face a later drag

Capital Economics estimates that AI investment contributed roughly 0.3 percentage points to real GDP growth in 2025. The firm expects a similar boost this year. In a Friday research note, Capital Economics chief economic advisor Vicky Redwood said falling AI investment in 2028 could become a drag on GDP. She estimated that a 10% annual decline from current spending levels would reduce GDP growth by around 0.1%.

Equity markets also at stake

Brown estimates that the wealth effect from rising equity prices is adding roughly 0.5% to economic growth this year. He said a slowdown in data center construction could be accompanied by weakness in the equity market. Brown described potential stock-market weakness as a sign of what may lie ahead if construction slows.