In the 1990s, businesses restructured their digital infrastructure to accommodate the rise of the internet. Now, they’re doing it again—this time, for artificial intelligence.
Tech giants are pouring hundreds of billions into AI-specific data centers, where high-powered GPUs (graphics processing units) work together to process vast amounts of data. Unlike the general-purpose CPUs that once dominated computing, GPUs can handle complex AI tasks far more efficiently. Companies are cramming thousands of these chips into hyperscale data centers, fundamentally reshaping the way the world builds and operates computers.
This shift is not just about improving AI capabilities—it’s an economic and industrial transformation. In January, OpenAI announced plans to spend an estimated $100 billion on new AI supercomputing hubs, beginning with a massive facility in Texas. Over the next decade, the company and its partners plan to invest an additional $400 billion in similar projects.
The scale of these investments is staggering. For comparison, when Google launched its first major data center in 2006, the company spent $600 million. Today, individual AI facilities require capital outlays measured in the tens of billions. Meta, Microsoft, Amazon, and Google’s parent company, Alphabet, collectively project over $320 billion in capital spending this year—primarily directed toward AI infrastructure.
But as AI computing scales up, so do its demands on electricity and water. The latest generation of AI models requires orders of magnitude more power than traditional data centers. OpenAI’s planned facilities alone will consume more electricity than the three million households in Massachusetts. Meanwhile, Google’s AI data centers used over six billion gallons of water in 2023, with consumption rising sharply.
The resulting economic impact is profound. Private equity firms are funneling capital into data center development, while demand for electricians, engineers, and data center operators is skyrocketing. However, local communities are beginning to push back. Concerns about excessive energy usage, water consumption, and the long-term sustainability of these facilities are mounting.
Despite these challenges, the AI arms race is accelerating. Companies are scrambling to secure land, resources, and power sources at a pace that few industries have seen before. The fundamental reengineering of computing is underway, and the coming decade will determine whether AI’s infrastructure boom is a technological revolution—or an unsustainable energy drain.