(Reuters) -Construction spending on U.S. data centers reached an all-time high of $40 billion at a seasonally adjusted annual rate in June, as technology giants continue pouring billions into AI infrastructure, according to a Bank of America Institute report.

BY THE NUMBERS

The June figure represents a 30% increase from the previous year, following a 50% surge in 2024, the report said, citing U.S. Census Bureau data.

WHY IT'S IMPORTANT

The boom in generative AI and machine learning is fueling demand for computing power, prompting tech heavyweights including Microsoft, Alphabet and Amazon.com investing billions in setting up the infrastructure.

These hyperscalers have been spending billions to scale their operations to support AI workloads, creating a windfall for semiconductor companies like Nvidia , which supplies chips used in data centers and derives the bulk of its revenue from such sales.

KEY QUOTES

"Hyperscalers are a big part of the increased demand for power, but they're not the whole picture," Bank of America Institute economists led by Liz Everett Krisberg said in the report.

"In fact, most of the expected rise in U.S. electricity demand through 2030 is coming from things like electric vehicles (EVs), heating, industrial reshoring, and electrifying buildings."