Tech companies including Microsoft, Alphabet, and Amazon are investing heavily in new and expanded facilities to meet growing demands in the data center market
In sum – what to know:
Data center spending hit $40B – U.S. construction surged 30% year-over-year in June, reflecting unprecedented investment levels in digital infrastructure.
AI fuels infrastructure demand – Growth in AI and machine learning is prompting hyperscalers like Microsoft, Amazon, and Alphabet to expand capacity at speed.
Energy challenges ahead – Data center growth adds to rising electricity demand, alongside EVs and industrial reshoring, raising concerns for utilities and policymakers.
Spending on U.S. data centers climbed to a record of $40 billion in June, a 30% increase from last year, according to a new report from the Bank of America Institute.
The growth is driven primarily by artificial intelligence (AI) and machine learning, which require extensive computing infrastructure. Tech companies including Microsoft, Alphabet, and Amazon are investing heavily in new and expanded facilities to meet these demands, according to the report.
This surge follows a 50% increase in spending recorded during the same period in 2024. The trend reflects how the expansion of AI technologies continues to reshape the digital infrastructure sector, the report added.
Nvidia has also been a key beneficiary, with its GPUs widely used in AI training and inference. The growing reliance on high-performance chips underscores the broader industry effects of the data center buildout.
The report also highlighted wider concerns about rising electricity demand. Alongside AI data centers, power consumption is expected to grow due to the spread of electric vehicles, industrial reshoring, building electrification, and new heating systems.
The rapid growth of U.S. data center construction is expected to challenge utilities and policymakers as they work to balance infrastructure needs with sustainability and grid reliability, the report stated.
The North American data center sector is facing a deepening supply crunch as vacancy rates hit record lows despite a surge in new development, according to JLL’s midyear 2025 North America data center report.
The firm warns the market has reached a “critical tipping point,” where soaring demand, limited power, and lengthy build timelines are forcing operators and enterprises to rethink strategies.
Colocation vacancy has fallen to just 2.3%, even as installed capacity rose to 15.5 GW. Northern Virginia continues to dominate with 5.6 GW—over three times Dallas-Fort Worth’s 1.5 GW. Cloud providers drove 65% of leasing activity in the first half of 2025, according to JLL.
Looking ahead, JLL forecasts up to $1 trillion in North American data center investment from 2025–2030, with more than 100 GW of capacity potentially delivered. Current planned development totals 31.6 GW, led by Northern Virginia (5.9 GW), Phoenix (4.2 GW), Dallas-Fort Worth (3.9 GW), and Las Vegas/Reno (3.5 GW).
