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AI capex counts only the servers
Paid years ahead
Buildings and power plants get paid for years ahead of the chips. The buildings for next year's capacity go up this year, and the turbines for the year after must be bought now. Data centers last 15 to 20 years and power plants 30, so each year's spending includes the foundation for future growth.
Trillions by 2030
Adding 100 gigawatts a year at current prices is about $5 trillion of capex, and counting the future-year buildings and turbines pushes it to $7 trillion to $10 trillion by the end of the decade. A 100-gigawatt year pared down to 2028 comes to $3 trillion to $4 trillion: over $2.5 trillion on IT, and another $1 trillion to $2 trillion on data centers, energy, and the downstream supply chain, including semiconductors.
Share of the economy
At $10 trillion a year, spending would reach close to a tenth of the world economy, and a third to a quarter of the US economy at its current size if it all landed there.
Why are data centers built before chips arrive?
A data center shell with its electrical and cooling systems typically takes a year or two to build, longer than the servers take to order and install. Builders therefore break ground on buildings for capacity that will not hold chips until later. The result is that spending on buildings runs ahead of the chips that will fill them.
Why do gas turbines take years to get?
Only a handful of manufacturers build large gas turbines, among them GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries. Their blades and casings need specialized castings and testing, and factories take years to expand. Buyers have been placing orders for delivery several years out.
Why do buildings outlast the chips inside?
New chip generations arrive about once a year, and each one does more work per watt, so servers are usually depreciated over five or six years. Data center shells last 15 to 20 years and power plants about 30. The building and power plant are therefore reused across several generations of hardware.
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