The trend of exponential growth in data center construction continued through the third quarter of 2025, with spending reaching an unprecedented $42 billion annualized, a staggering 18.5% increase year-on-year from October 2024. This surge nearly equaled the $45 billion spent on office building construction, signaling a seismic shift in infrastructure priorities across the United States.
Spending on data centers has seen remarkable expansion since 2022, when the launch of ChatGPT fueled demand for digital infrastructure. By 2025, investment in data centers had tripled, with projections suggesting it could soon surpass office construction spending. In contrast, office building investment has been in sharp decline, decreasing by 40% amidst a post-pandemic slowdown in demand.
This dramatic change highlights a broader transformation in the U.S. construction market. According to the article, "Spending on infrastructure had a major shift in the US market, reversing the previously peak level of office construction." If the current growth trajectory continues, data center spending is expected to overtake office investment by the end of 2026.
The rapid acceleration observed in data center construction is a far cry from its modest beginnings. In 2014, the sector accounted for just $1.4 billion in investments. Fast forward to 2025, and the data center industry has become a cornerstone of U.S. infrastructure planning, competing with office buildings, warehouses, and industrial construction for resources and land.
Decisions on land acquisition and power sourcing are increasingly pivotal as the industry scales. The costs associated with constructing a data center range from $600 to $1,100 per square foot, inclusive of equipment peripherals. Large-scale facilities can require investments between $250 million and $500 million, while smaller ones can range from $2 million to $5 million.
The soaring demand for data centers has also brought attention to their potential environmental impact. "The biggest effect of planned data centers will be their electricity demand", the original article notes. Presently, data centers account for roughly 2% of global electricity usage, but this figure could grow to 9% by 2050, raising concerns about energy consumption in certain regions.
The impact of this construction boom extends beyond real estate. Data center growth is influencing commodity markets, particularly for materials like copper and certain precious metals essential to computational components. This ripple effect is also seen in elevated prices for memory and other hardware needed to support advanced AI computations.
Globally, data center construction is expected to reach $300 billion in 2026 and could expand to over $760 billion by 2035. The United States remains at the forefront of this growth, leveraging quick access to financing and abundant suitable locations.
However, the rapid expansion faces potential challenges, including bottlenecks in energy contracts, fluctuating copper prices, and local opposition to projects due to concerns about pollution and water consumption.
Interestingly, former cryptocurrency firms are emerging as significant players in this sector. Companies like Applied Digital and IREN, once focused on blockchain and cryptocurrency mining, are now leading the charge in large-scale data center construction.
Applied Digital, previously known as Applied Blockchain, recently broke ground on a 430-megawatt facility at an undisclosed U.S. location. The announcement sent its stock (APLD) surging to $37.01, nearing its all-time high. Similarly, IREN is involved in several ambitious projects, including expansions for 2-gigawatt and 750-megawatt data centers in Texas and other U.S. locales. The shift into data centers has boosted IREN stock to $52.52, near its highest price in the past year.
As the demand for data storage and processing power continues to grow, the U.S. data center industry is poised to transform the nation’s infrastructure landscape, changing not only how businesses operate but also how resources are allocated in a rapidly evolving economy.
