AI Boom Spurs Data Center Investment Surge

J.P.Morgan projects that spending on data centers will significantly boost the U.S. economy by 2025-2026, driven by the artificial intelligence boom. Investment in AI-related technologies is leading to increased demand for data centers, construction, and energy infrastructure, potentially adding 10-20 basis points to GDP growth.

J.P.Morgan predicts that spending on data centers, crucial for powering artificial intelligence (AI) advancements, could markedly boost U.S. economic growth by 2025-2026. This projection comes as technology firms accelerate investments following the AI outbreak initiated by OpenAI's 2022 launch of ChatGPT.

The brokerage highlights that the surge in data center investments will likely enhance Gross Domestic Product (GDP) through increased demand for construction, technology equipment, and additional power infrastructure. Figures suggest a 0.1%-0.3% contribution to GDP growth by 2024.

Moreover, political support has been solidified by President Joe Biden's recent executive order facilitating the energy demands of burgeoning AI data centers. Nonetheless, J.P.Morgan warns that sustained growth will depend on the realized returns of these substantial investments.

(With inputs from agencies.)