U.S. data-center hardware spend tops housing investment
U.S. spending on information-processing equipment hit $752 billion in the second quarter, edging past $748 billion in residential fixed investment, Fortune reports, citing Bureau of Economic Analysis figures flagged by a San Francisco Fed vice president on LinkedIn.
Information-processing equipment is the government category that covers computers and data-center gear. Real private residential fixed investment is the money spent building and improving homes. Residential spend was down 18% from an early-2021 peak; information-processing equipment rose 51% over that span.
Adam Shapiro, a VP at the San Francisco Fed, posted that the country is seeing a pivotal shift: investment moving away from residential investment and toward computers. He called the AI investment boom massive.
A handful of hyperscalers, giant cloud and AI companies pouring capital into servers and power, are expected to push AI infrastructure toward $1 trillion a year soon.
The 30-year mortgage rate is nearly 7% as the 10-year Treasury yield hit its highest level since 2007. Treasury Secretary Scott Bessent said corporate issuance for the AI buildout is nearly “yield-agnostic,” meaning companies keep borrowing even when rates stay high because they expect the returns to cover the cost.
S&P Global last month estimated that capex, capital expenditure, from Alphabet, Amazon, Microsoft, Meta, Oracle, and SpaceX will exceed $1.3 trillion in 2027, up from a projected $870 billion in 2026 and $470 billion in 2025. Industry capex is growing faster than revenue. Operating cash flow from the six hyperscalers is projected collectively negative in 2026 and 2027, with S&P seeing a 2028 inflection as revenue rises and capex flattens.
An NBC News poll found 64% of registered voters less likely to support a candidate favoring a data center in their community. Housing starts fell 2.6% in August to an annualized 1.275 million.
The AI buildout crossed the residential line in the BEA print. Capex is still accelerating while the neighborhood vote turns cold.