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Spending on U.S. data center buildings hits record $85 billion annual pace, up 73% in a year — and Census doesn’t count the servers and racks inside Marks fastest rate of annual growth in over a year. Private data center construction spending is up over 73%, from $49.05 billion to $84.95 billion, year over year (YoY), according to the Census Bureau’s detailed construction spending tables for August. Spending is at a record annual pace, and growth is the fastest since April 2025’s +88.2%. Data center buildouts are now about 63% of all private office construction. The report, released last week, uses Census definitions that exclude any value of “racks or servers in data centers” from its construction spending numbers. It also does not speculate on any cause of the spending increase. The Census data covers the Value of Construction Put in Place, measured monthly, to calculate what a full year would total at that month’s pace. Data center construction is defined as “[including] buildings that contain the hardware needed for storing, processing, and transmitting digital information,” a subcategory of private office. Power plants and transmission lines built to meet data center power demand fall under Census’s separate power category. The $39.1 billion gap between general office and data center construction spending is the widest in the series since Census data begins in January 2014. The former is at $45.8 billion, down 9.7% YoY and 34.8% since Jan. 2023. Data centers have, in fact, beaten the general office every month since Sept. 2025. Data center construction now sits at over nine times its Jan. 2021 level of $9.26 billion. Data center construction has become the majority of private office construction, about 63% versus 47% a year earlier, and with forecasts for data center power use still climbing, that is likely to remain the case moving forward. Private nonresidential construction was at $773.0 billion, down 1.0% YoY, or $688.1 billion and down 5.9% YoY if data centers are excluded. Of the $8.0 billion monthly rise in private nonresidential spending, $5.9 billion or 74% was for data centers. Manufacturing, down 19.8% YoY, fits the same pattern, and data center construction is now about half its size. Power construction, up 9.7% YoY, is the other big gainer. Taken together, the picture painted is that the construction industry’s growth depends heavily on data center projects. This follows Associated Builders and Contractors chief economist Anirban Basu’s statement in a Sept. 1 release that July’s nonresidential gain was “entirely due to data centers,” and that power’s growth was boosted by their electricity needs. Growth has gotten faster for four months now. In addition to August’s reported gain, May was +36.3% YoY, June was +55.2%, and July saw +65.3% by our math. As the numbers do not include server spend, which is also growing due to rising hardware costs from AI demand, the Census only shows part of the picture. The acceleration in construction is nevertheless a strong indicator of where things are headed. September’s results are expected on Nov. 2 and may continue the trend. Get Tom's Hardware's best news and in-depth reviews, straight to your inbox. Follow Tom’s Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds. Shane Downing is a Contributing Writer for Tom’s Hardware, covering consumer storage, PC hardware, and AI. - Why_Me Arkitekt78 said:Imagine if that money were spent on things that would actually benefit humanity.Such as ... Reply - bill001g Arkitekt78 said:Imagine if that money were spent on things that would actually benefit humanity.It kinda does. A lot of the money currently being spent is for all the guys pouring the concrete and installing all the air conditioning, electrical etc etc. So in the short term it provides lots of people with a paycheck. In the longer term its much harder to say if AI is going to cure cancer or kill humans off. What is strange is they are going get their fancy data center built and have to stand in line waiting to get the computers to put in them. Reply - alan.campbell99 It's even just money spent on something with no guaranteed ROI requiring an insane amount of brand new revenue to justify, it's also hoovering up a stupid amount of VC funding which potentially means less for other startups. Who knows what products or ideas might not come about because of that. I also don't see much if any expansion of renewable power generation, instead it's going backwards with more gas generation instead.Reply - Why_Me alan.campbell99 said:It's even just money spent on something with no guaranteed ROI requiring an insane amount of brand new revenue to justify, it's also hoovering up a stupid amount of VC funding which potentially means less for other startups. Who knows what products or ideas might not come about because of that. I also don't see much if any expansion of renewable power generation, instead it's going backwards with more gas generation instead.The US has plenty of natural gas. Reply
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