Data centers are unpopular — and a key motor of economic growth

The shifting political winds surrounding data centers could buffet the entire U.S. economy, reducing investment in artificial intelligence and slowing growth, according to Wall Street analysts. The historic tide of money pouring into AI, from data centers and frontier models to state-of-the-art chips and networking gear, has boosted business investment and financial markets in recent years. Federal Reserve researchers recently estimated that spending on data centers, power facilities and other AI-related tech equipment accounted for roughly 20% of U.S. gross domestic product over the preceding year. In 2026, spending by "hyperscalers" such as Alphabet, Amazon, Meta and Microsoft — the companies racing to build data centers — is set to double to around $800 billion and is expected to reach $1 trillion in 2027, according to Capital Economics.

Although slowing that buildout might well serve the public interest, given the widespread opposition to data centers, crimping that flow of dollars will have knock-on economic effects."Our economy is leveraged on this idea that AI will make us rich," economist Allison Schrager with the Manhattan Institute, a nonpartisan think tank, told CBS News. "There are risks to making it slower — it will mean slower growth.""Detrimental effects"Economists and investors now expect the Democrats' sweeping midterm election wins to both slow and increase the cost of data center development across the U.S. By