When data center investment surpasses office buildings
Driven by the AI boom, spending on data center construction in the United States is growing at an astonishing rate, expected to surpass the cost of office building construction. According to data from the U.S. Census Bureau, as of July this year, annual spending on data centers has reached $41 billion, an increase of 2200%. Notable investor David Einhorn warns of potential capital destruction, while OpenAI's Sam Altman believes that the construction pace remains slow. Tech giants like NVIDIA and OpenAI have announced new construction plans worth hundreds of billions of dollars, further driving up spending
Driven by the AI boom, spending on data center construction is surging at an unprecedented rate and is about to historically outpace the growth rate of office building construction costs.
According to recently released data from the U.S. Census Bureau, annualized spending on data center construction in the U.S. has soared to $41 billion in the year ending July this year, nearly matching the construction costs of all private office buildings in the U.S.
This shift has significantly accelerated since the release of ChatGPT at the end of 2022, prompting official statistical agencies to begin categorizing data centers as a separate statistical category.
Data also shows that since July 2014, the increase in spending on data center construction has reached 2200%.
Notable investor David Einhorn warned this week that this cycle "is very likely to lead to massive capital destruction." Meanwhile, OpenAI's Sam Altman believes that even with hundreds of billions of dollars invested, the pace of construction may "still seem too slow" in the long run.
It is worth noting that current data does not fully reflect the scale of future investments. Tech giants including NVIDIA, OpenAI, Oracle, SoftBank, and Meta have announced new construction plans worth hundreds of billions of dollars, which will further drive up spending data.
Reports indicate that NVIDIA and OpenAI are planning a $100 billion super data center project with a power capacity of 10 gigawatts. Additionally, OpenAI, Oracle, and SoftBank have announced their $500 billion "Stargate" project, while Meta is advancing its "Titan Cluster" data center plan.
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