It’s bigger than the railroad expansion of the 1850s, the Apollo space program that put astronauts on the moon in the 1960s and the decadeslong build-out of the U.S. interstate highway system that ended in the 1970s.
We’re talking about the data centers now being built and financed by some of the world’s biggest companies in the artificial-intelligence boom. Four U.S. tech giants—Microsoft, Meta, Amazon, and Google—are planning to spend $670 billion to build out AI infrastructure this year alone as they scramble to increase the computing power needed to operate and scale their AI-related endeavors.
And if you compare this spending to some of the biggest capital efforts in U.S. history by percentage of gross domestic product, you can see exactly how staggering the figures are, reports The Wall Street Journal (Feb. 9, 2026). In fact, it’s dwarfed only by the Louisiana Purchase, completed in 1803, which doubled the size of the U.S. and consumed 3% of the GDP. (The AI buildout is projected at 2.1% of GDP, while railroads in the 1850s were 2%, the US highway system was 0.4%, and the Apollo space program was 0.2%).
The four companies’ capital spending has been increasing as a percentage of their annual revenue the past few years. In 2026, Meta’s spending could amount to more than 50% of its sales for the first time ever.
How is this build-out an OM issue? First, as we discuss in Chapter 2, these four companies are betting that they will attain competitive advantage by competing on low-cost and response. Second, our chapter on sustainability (Supp. 5) points out the costs of carbon footprints, which data centers generate heavily. Third, as we note in the chapter on location strategies (Ch. 8), the centers locate where power is cheap and plentiful.
As of late 2025, Northern Virginia has 64 data centers under construction, solidifying its position as the world’s largest data center market. The region hosts over 550 existing facilities. They consume massive amounts of power, comparable to the total usage of large states like Minnesota.
Classroom discussion issues:
- Discuss the plusses and minuses of this massive construction trend.
- What do the builders hope to obtain?
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