Data Center Capex Grows in U.S., But Some Cracks Start to Appear

---

Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

---

Summary

Actual and planned capital outlays for U.S. data centers continue to surge, as four large U.S. technology companies upped plans to invest in the computer campuses and new data from the U.S. government showed data center investment increased in the second quarter. Investors have grown anxious about the spending plans of some companies.

---

Actual, Planned Capex Spending Still Soaring

On July 30, the Bureau of Economic Analysis, a branch of the U.S. Department of Commerce, released new data on actual capital expenditures (capex) on U.S. data centers for the second quarter. Outlays during the quarter increased to US$49.3 billion, a 22% gain over comparable year-earlier investments of US$40.4 billion, continuing a lengthy string of rising investments in the facilities that train large language models and power artificial intelligence (AI).

The second-quarter actual spend tracked by BEA is only a small fraction of what data center developers and tech companies plan to invest this year and over the three-year period of January 2026-December 2028.

Industrial Info Resources is tracking plans by data center developers and technology companies to begin building about 2,441 data centers in the U.S. between January 2026 and December 2028. The total investment value (TIV) of those planned computer campuses is approximately $2.48 trillion, more than the gross domestic product (GFP) of Australia, Mexico or Spain. Readers can access a list of those proposed projects here.

The states with the greatest dollar value of proposed data centers scheduled to be constructed over this three-year period are: Texas (US$637.6 billion), Virginia (US$249 billion), Ohio (US$168.7 billion) and Georgia (US$159.7 billion).

Four Hyperscalers Discuss Capex Plans

Four large technology companies -- Alphabet Incorporated (parent to Google), Amazon.com Incorporated, Meta Platforms Incorporated and Microsoft Corporation -- are expected to build a significant portion, but not the majority, of U.S. data centers over the next three years.

Looking out over the three-year period between January 2026 and December 2028, Industrial Info Resources is tracking plans by these four hyerscalers to begin construction of 548 data centers in the U.S., valued at US$513 billion, according to IIR's Global Market Intelligence platform. Readers can access the project reports for these proposed projects here.

The U.S. states with the greatest dollar value of planned data center projects from those hyperscalers over that three-year period are: Texas, Virginia, Indiana and Ohio.

In earnings calls last month, the leaders of those four companies estimated they would invest about US$710 billion this year to build data centers in the U.S., nearly double what they spent in 2025 and nearly four times what they spent in 2023.

By the Numbers

• US$49.3 billion: Capital investment in U.S. data centers in the second quarter, a 22% gain over comparable year-earlier investments of US$40.4 billion.
• 2,441: Planned data centers in the U.S. scheduled to begin construction between January 2026 and December 2028.
• US$2.48 trillion: Total investment value of the planned 2,441 proposed data centers.

Actual Project Activity Often Differs from Plans

"It's always true that not all planned projects, in any industry, get built as planned, and that's particularly true with data centers," said Foluso Nwanguma, IIR's vice president of research for North American Data Centers. "Data centers constitute one of the most dynamic sectors in U.S. business history, with numerous new projects announced each day."

"But we have also noted a rising level of project postponements and cancellations, caused by growing popular resistance to planned data centers, and a rising level of city, county, state and federal efforts to slow down planned construction," she continued.

Nwanguma pointed out that some investors have started to express concerns about the data center aspirations of some companies, such as Alphabet and Meta, alarmed investors when they disclosed their free cash flow turned negative in the just-completed period. But other data center hyperscalers, such as Amazon and Microsoft, continued to report robust free cash flow, which is defined as funds remaining after funding operating expenses and cash capex during a period. Negative free cash flow suggests an imbalance, perhaps a temporary one, between a company's aspirations and its revenue stream, forcing firms to borrow funds or float stock issues to come up with the capital they cannot generate internally.

"It is clear that, for some companies, investors' patience is wearing thin with ever-increasing plans to build data centers," Nwanguma said. Sinking investor enthusiasm for some companies' data center plans may cut into the total number of projects actually constructed.

Data Centers Emerge as a Flashpoint

Beyond investors and analysts, politics, no less than economics, may shape how many data centers eventually get built in the U.S.

The Trump administration has strongly backed data center construction. A late-2025 executive order from the president sought to preempt states and local authorities from regulating or limiting data center construction. But there are unanswered legal questions about a president's ability to intervene in interstate commerce. The U.S. Constitution gives Congress the power to regulate commerce with foreign nations as well as between states. Republicans on Capitol Hill are seeking to achieve the Trump administration's data center aims through legislation, though nothing has passed yet.

But data centers have emerged as a flashpoint in communities across the nation, which may limit Congress' ability to pass legislation on what has become a hot-button topic. New York was the nation's first state to temporarily pause permitting of new data centers, and approximately a dozen other states are considering similar measures. Public opinion polls have turned against data centers over the last year, and over 100 cities and counties have enacted temporary pauses on the construction of new large facilities, known as hyperscale centers. For more on that, see July 7, 2026, article - Money, Votes and Data Centers: Will Political Spending Overcome Rising Public Opposition to Data Centers?

"The data center industry currently is benefitting from some significant tailwinds but also encountering some heavy headwinds," Nwanguma said. "What will be the net effect of these opposing forces? Stay tuned."

Key Takeaways

• Capital investment in U.S. data centers continued to rise in the second quarter, to about US$49.3 billion.
• The surge in spending is not expected to slow down anytime soon: Data center developers and technology companies plan to begin construction on an estimated 2,441 data centers in the U.S. between January 2026 and December 2028, worth US$2.48 trillion, more than the annual gross national product of many countries.
• Investors are starting to split over the data center construction aspirations of some hyperscalers, such as Alphabet and Meta.
• Non-economic factors, such as legislation, court decisions and popular sentiment, may also affect how many data centers get built in the U.S.

---

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).