Every economic cycle produces a development project nobody wants to live nearby but everybody wants the benefit of. “Not in my backyard!” On the In the Harbor podcast, our managing partner Richard Consul, CFA, applied that idea to the current wave of AI data-center build-out by the hyperscalers.
Hyperscaler capital expenditure is running near $800 billion this year, and closer to a trillion once suppliers are counted. On a roughly $30 trillion economy, that is close to 3% of GDP, and by some estimates a large share of the country’s near-term growth.
More and more communities are pushing back on these developments. But that spending has to be sited somewhere. Richard’s point, drawn from watching heavy industry leave the Detroit area, is that a community declining a project does not remove the trade-off. It transfers it, and the employment with it, to communities that want the jobs.
The key question is whether the objections and the economic consequences are being evaluated together, or separately.