AI buildout

Purpose

To fully utilize infrastructure, support new compute-intensive AI use cases (reasoning models, agentic systems, physical-world applications like robotics)

Current State

Hype cycle

Core Components

High-value service exports (chip design, software, cloud services, intellectual property, consulting, data analytics, engineering support)

Economic Impact

Historic shift in the global economic landscape, early stages of a modern industrial revolution

Potential Threat

Tariffs

Key Beneficiaries

Semiconductor designers and manufacturers, cloud providers, computer and network equipment makers, data center Real Estate Investment Trusts (REITs)

Underlying Strength

United States' dominance in tradable services

Major Investor Spending (2025)

Over $350 billion by Google, Amazon, Meta, and Microsoft on AI-related data centers

Projected Cost (Morgan Stanley)

$3 trillion over the next three years

2025

The United States is in the midst of an unprecedented AI infrastructure buildout. Google, Amazon, Meta, and Microsoft collectively plan to spend over $350 billion on AI-related data centers in 2025 alone. Morgan Stanley projects the total AI buildout could cost up to $3 trillion over the next three years. Yet this historic investment is colliding head-on with the administration’s trade policy priorities, creating a fundamental tension that threatens to undermine the United States’ technological [...] While it’s easy to fixate on chips, transformers, and servers, the core of AI acceleration is actually a network of high-value service exports, everything from chip design, software, cloud services, and intellectual property to consulting, data analytics, and engineering support. As I argued in “Beyond Manufacturing: Why Services Are Key to U.S.-China Economic Competition,” the United States’ strength in tradable services is the backbone of innovation and productivity. [...] #### What’s Really at Stake: The United States’ Service Export Dominance While each of these costs is significant individually, focusing too narrowly on the arithmetic of tariff lines and exemptions risks losing sight of the bigger picture. The real economic engine powering the United States’ AI buildout is built on U.S. dominance in tradable services.

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The unfolding AI-driven industrial build-out appears to be signaling a historic shift in the global economic landscape, bringing both amazing new opportunities and ongoing challenges for advisors. The Investments & Wealth Institute remains committed to supporting advisors in their professional endeavors through rigorous education, world-class certification programs, and up-to-date insights on market trends. Our focus on continuous professional development ensures that our certified [...] Is it possible we are living and investing in the early stages of a modern industrial revolution? Some known facts and observable trends in the infrastructure build-out around artificial intelligence (AI) — namely the explosive growth of AI data center construction — suggest the answer may be “yes.” As public familiarity with AI continues to grow, financial advisors are likely to see more client interest in AI-related investments. Being able to provide thoughtful guidance on potential AI [...] Meanwhile, the build-out of AI infrastructure has sparked a corresponding demand for specialized real estate capable of hosting data centers. Real Estate Investment Trusts (REITs) that focus on data centers are already seeing new opportunities to expand their businesses, as secondary markets such as Indiana and Iowa suddenly become more prominent. For advisors, understanding how data center REITs are positioned within the AI ecosystem could improve their ability to advise AI interested clients

While some of the early investment beneficiaries of generative AI adoption were software applications and semiconductor chip makers such as Nvidia, Goldman Sachs research predicts the next phase of the AI trade will be in AI Infrastructure. Goldman predicts companies that stand to benefit from the buildout of AI-related infrastructure will include: semiconductor designers and manufacturers, cloud providers, computer and network equipment makers, data center real estate investment trusts, [...] While some of the early investment beneficiaries of generative AI adoption were software applications and semiconductor chip makers such as Nvidia, Goldman Sachs research predicts the next phase of the AI trade will be in AI Infrastructure. Goldman predicts companies that stand to benefit from the buildout of AI-related infrastructure will include: semiconductor designers and manufacturers, cloud providers, computer and network equipment makers, data center real estate investment trusts,