Deep Dive: The $710 Billion Data Center Arms Race — Why AI Infrastructure Has Entered 'Hyperdrive' and What It Means for Investors
The data center industry has crossed a threshold that even its most bullish proponents didn't anticipate. According to a new report from JLL released this week, data center vacancy rates remained at a historic low of 1% for the second consecutive year at the end of 2025, while a staggering 35-gigawatt construction pipeline is expanding beyond traditional markets at a pace that is redrawing the geography of digital infrastructure in North America. Texas is about to unseat Virginia — the longtime king of data center markets — as the world's largest data center hub, a shift JLL calls an "inflection point" in how and where the backbone of the AI economy is being built. The catalyst is straightforward: hyperscalers including Microsoft, Alphabet, Amazon, and Meta have earmarked a combined $710 billion in planned capital expenditures for 2026 alone to build out AI and cloud infrastructure, and existing markets simply cannot absorb the demand. For investors, this is no longer a theoretical opportunity. The numbers reveal an industry where nearly all capacity under construction is already spoken for, where record financing is flowing in, and where the only meaningful constraint is the physical infrastructure — power grids, water systems, and land — needed to keep building. Understanding the dynamics at play is essential for anyone with exposure to technology, real estate, or energy markets.