US Data Center Spending Tops Residential Investment for First Time

U.S. inflation-adjusted spending on information-processing hardware, including data centers, rose to $752 billion in the second quarter, surpassing real private residential fixed investment of $748 billion—a first, according to Bureau of Economic Analysis data cited by San Francisco Fed Vice President Adam Shapiro on September 20, 2026. Information-processing outlays have climbed 51% since early 2021, while residential investment has fallen 18% from its peak, as the 30-year mortgage rate near 7% and the 10-year Treasury yield at its highest since 2007 freeze housing activity. AI capital spending has proven less rate-sensitive, with hyperscalers issuing debt to fund build-outs. S&P Global projects combined capex from Alphabet, Amazon, Microsoft, Meta, Oracle and SpaceX will exceed $1.3 trillion in 2027, up from $870 billion in 2026, warning of overcapacity risk and negative aggregate operating cash flow through 2027.