Improvements to roads, bridges, and other infrastructure could be hindered as data center construction booms, according to Bloomberg.
In 2025, state and local governments reportedly sold a record amount of debt for the second consecutive year. Strategists predict another $600 billion in sales next year. Most of that funding is expected to go toward infrastructure projects.
Meanwhile, Census Bureau data reportedly shows that private spending on data center construction was running at an annualized rate of more than $41 billion. This is roughly equal to what state and local governments spend on transportation construction.
All these projects are likely to compete for construction workers. This occurs just as the industry faces labor shortages caused by retirements and President Donald Trump’s immigration crackdown.
The driving force behind this sudden spike is the booming Artificial Intelligence (AI) sector. Tech giants are racing to build server farms to power models like ChatGPT and Gemini. This creates an insatiable demand that traditional infrastructure projects are struggling to match.
Beyond labor, the rivalry extends to essential materials. High demand for electrical components, HVAC systems, and steel is driving up costs. This means tax dollars meant for public works may not stretch as far as intended.
Andrew Anagnost, CEO of architecture and design software maker Autodesk, told Bloomberg there’s “absolutely no doubt” that data center construction “sucks resources from other projects.”
He stated, “I guarantee you a lot of those [infrastructure] projects are not going to move as fast as people want.”