The AI build-out is on track to become the biggest economic bet in U.S. history, dwarfing the investments made to fund other huge U.S. infrastructure projects such as the railroads, the highway system and the plumbing for the internet.

Total investment in data centers and related artificial-intelligence infrastructure is projected to total $10.3 trillion from 2025 to 2032, according to new estimates by economist Stijn van Nieuwerburgh published by the Brookings Institution. That is a staggering 3.6% of gross domestic product a year, on average. Never before has the U.S. economy been so dependent on the build-out of a single industry.

The investment is transforming every corner of the economy, creating hundreds of thousands of jobs and minting new billionaires.

It is also creating significant risk, as much of it is built on debt. An abrupt slowdown could ignite shock waves throughout the U.S. economy.

Projecting investment is tricky, and total spending might well end up substantially lower. Still, the money poured into data centers this year already represents an investment unprecedented in recent history. AI investment in the U.S. is projected to hit 1.9% of GDP in 2026, according to new estimates from Goldman Sachs. The railroad boom of the late 19th century marked the last time the build-out of one new industry accounted for a larger share of the economy.

Here are some important impacts all that money is having on the economy:

Construction

The flood of money spent on the build-out of data centers has represented a bright spot in an otherwise dark time for the construction industry.

Through July of this year, a seasonally adjusted $37 billion has been spent on private data- center construction-about $9 billion more than in the first seven months of last year, according to the Commerce Department.

Private construction spending on everything else-houses, apartment buildings, shopping centers and so on-was about $46 billion below year-earlier levels in the first seven months of this year.

Hyperscalers are tying up scarce workers and electricity, raising costs for other businesses. The Richmond Fed recently reported that data-center construction is straining labor availability in its area.

Last year, Mississippi was in the running to land an aluminum smelter, along with an estimated 1,000 permanent jobs. But a data center was announced near one of the proposed sites, near Vicksburg, tying up electricity needed for the smelter, according to a person familiar with the operator's decision-making. So, the smelter chose Oklahoma instead.

It isn't just electricity: In many places, data centers are pushing up land costs. "It's crowding out manufacturing," said Didi Caldwell, a site-selection consultant who works with heavy industry.

Financing and risk

Analysts estimate that capital spending at five of the so-called hyperscalers-Alphabet, Amazon.com, Meta Platforms, Microsoft and Oracle-will be $4.2 trillion in the four years ending in 2029, according to FactSet. A growing share of that spending is financed by debt.

That level of spending raises risks for the financial sector if the boom goes bust. Van Nieuwerburgh said often tech companies use off-balance-sheet entities to borrow from banks and private-credit firms, and those deals usually come with little public reporting. The practice makes it hard to figure out how great the financial risks are, he added. If AI doesn't generate enough revenue to service the debt raised to build data centers, the fallout could ripple through the financial system.

Jobs

Economists are divided over whether AI is now meaningfully hurting employment among white-collar workers. What is clear, however, is that the build-out is putting some workers in very high demand. AI was behind more than 750,000 new jobs in the U.S. from 2023 through 2026 to-date, according to LinkedIn estimates. And those jobs pay well: The median salary for AI-related job listings on LinkedIn is around $180,000, compared with $80,000 for all jobs. "It's one of the robust areas of a very slow labor market," said Kory Kantenga, LinkedIn's head of economics for the Americas.

White-collar jobs such as data annotator and AI engineer account for most of the new positions, but employers have also added 117,000 jobs at data centers since the start of 2024. That doesn't count construction jobs, many of which aren't permanent.

In the Washington, D.C., area, the number of unionized electricians has risen from 9,000 to 17,500 in recent years, according to Don Slaiman, political coordinator of the trade union IBEW Local 26. "A lot of folks come here to pay off their college debt," he said. Kwaku Afriyie, 23 years old, has a college degree in cybersecurity and was working in an entry-level IT role when he started worrying about AI taking away his job. Last year he switched careers and became an electrician. Now he assembles components for data centers, making around $30 an hour as an apprentice.

More seasoned workers earn twice that rate. Tyler Beam, 28, has spent most of the past two years building data centers and working for a company that sends prefabricated parts to Amazon data-center construction sites across the country. Most recently, the electrician made $62 an hour, plus overtime. Beam often worked 58 hours a week, sometimes earning double pay. "They want to put them up as fast as possible," he said. The earnings have boosted his spending: Beam recently bought a GMC Yukon and is house-hunting.

The wealth effect

The AI-powered rally has led to huge gains in stock-market wealth. As of the second quarter, U.S. stock and mutual fund holdings came to $63 trillion, according to the Federal Reserve-nearly double the amount at the end of 2022. The trend has buoyed consumer spending even as inflation-adjusted wage growth has faltered. The gains have been particularly pronounced for the well-off, who tend to have more of their net worth tied up in stocks than the middle class do.

Nationwide, home sales have been mired in a four-year slump. But in Silicon Valley, AI money is fueling a surge in luxury-home sales. "This is the best it's been since 2000," said Ken DeLeon, a real-estate agent. DeLeon recently listed a five-bedroom home for $9.9 million. He got seven offers, and within two weeks it was in contract for more than $13 million. The winning bidder: an AI entrepreneur.

Inflation

Demand for equipment that goes into data centers-notably, memory chips-is leading to shortages and driving up costs for tech products. The prices importers paid for computers, peripherals (such as hard drives) and semiconductors were 20% higher in August than a year earlier. Those high import prices are in turn putting upward pressure on the costs of some consumer goods, such as iPhones and gaming consoles, and contributing to inflation.

Chicago Fed President Austan Goolsbee recently warned that data-center investment is pushing up wages in related fields. And Fed chairman Kevin Warsh named borrowing by hyperscalers as one reason why long-term interest rates are up, which in turn has made homeownership less affordable for millions of Americans. Electricity bills have surged in some areas with lots of data centers.