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[AI, circuit board] Andy/iStock via Getty Images Demand for artificial intelligence fueled a surge in U.S. data-center investment and higher prices for some technology inputs, but its effects [https://www.federalreserve.gov/econres/feds/files/2026074pap.pdf] on overall productivity and employment remained limited, according to a Federal Reserve staff paper. The paper by Nick Carollo, Leland Crane, Daniel Garcia Molina, and Joseph Nichols found that investment plans for new data centers exceeded $1T in 2025, up from nearly $300B in 2024. Based on announced projects as of May 2026, a middle-case scenario projected data-center-related investment reaching an annual rate of more than $880B by the end of 2027, or over 2% of GDP.
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