AI pacing is described as substantially faster than earlier technology eras, a well-established fact by analysts. The public is confounded, owing to the perceived rapid change of the technology, politicization, and conflicting information. To me, the evidence is mounting that the AI buildout is beyond the idea of boom or bust. This activity is diffusing throughout the economy with many sectors reaping some of the early benefits.
Real economy evidence
Several Federal Reserve districts report data-center construction as a leading source of regional activity. This activity extends to manufacturing, industrial real estate, steel, energy, air freight, and computer components. Interestingly, new AI-related infrastructure business models are emerging that include rented third-party infrastructure, hyperscaler GPU rental, and owned infrastructure, increasingly a segment heavily dominated by the hyperscalers and wanna bes.
In a January 2026 publication, neoclouds, largely former bitcoin miners, were discussed from observations across a couple of years of firsthand research. They are spanning these new business models with their competencies gained and evolving the potential of technology they house.
From early September, Federal Reserve Beige Book reporting identifies data centers as a major growth engine for construction, manufacturing, industrial real estate, and power demand in the districts of Cleveland, Ohio; Atlanta, Georgia; Chicago, Illinois; St. Louis, Missouri; Kansas City, Kansas; and Dallas, Texas.
Bottomline: Data centers were a key growth engine as reported by Fed data. In a recent Montana radio show, citizens revealed a different story than headlines portray, reflecting civil discourse and openness to what’s ahead.
Some granularity about the regions:
These regions, noted and discussed in the video, correspond to Federal Reserve Bank districts.
Recent Data on Key Areas of Capital or Investment Spending
From Federal Reserve data, the 2025 totals for the proxies of the AI buildout (minus software) are:
· Data center construction: ~$49.7B for the full year
· Computers/peripherals: ~$270.7B for the full year
Data center construction spending grew steadily (~30% year-over-year), while computers and peripherals spending were growing much faster (~72% year-over-year) to the first quarter 2026.
The AI trade has spread to virtually every corner of the market, though it is more concentrated in places. This is a work in progress, as announcements from various corners continue to roll out.
Increasingly, the use of AI technologies is becoming highly embedded in fields beyond the hyperscalers, though they are top users and builders. In 2026, this investment is increasing with some shifts to the proportionality.
The recent September manufacturing survey conducted by the Dallas Fed is instructive about risks ahead. Inflation was a top concern, followed by geopolitics, domestic policy uncertainty and cost of capital.
Read more Fed…
After the Fed: Jackson Hole Supports AI Buildout and Role in the Economy
In a video analysis, I highlight the recent Jackson Hole speech given by Fed Chairman Warsh on August 28th. I peruse his top-level comments on AI and the economy, the unknowns raised, his policy appr…
Read about what people in Montana think.
On Montana Radio, Civil and Interesting Engagement Shines Through
Co-host Bob Seidenschwarz talks to Jennifer Warren about data centers and the AI trade driving economic growth. A new white paper “AI Buildout: What You Need to Know” sparked the conversation.
Below is a breakdown from the video presentation, organized by Fed district.