From Billions to Trillions: Data Centers' New Scale of Investment
With Apple’s announcement to spend $500 billion over the next four years briefly overshadowing the $500 billion joint venture announcement of the Stargate project with the federal government, you can almost be forgiven for losing track of the billions of dollars in data center and tech spending announced by other industry players.
Apple’s Four-Year, $500 Billion Spend Resonates with Tech
The company’s data center infrastructure will see some collateral improvement to support future AI efforts, as a percentage of the funding will be dedicated to enhancing their existing data center infrastructure, though as yet there has been no public discussion of new data center facilities.
Apple has committed to spending over $500 billion in the U.S. during the next four years.
This investment aims to bolster various sectors, including AI infrastructure, data centers, and research and development (R&D) in silicon engineering.
The initiative also encompasses expanding facilities and teams across multiple states, such as Texas, California, Arizona, Nevada, Iowa, Oregon, North Carolina, and Washington.
The spend will be a combination of investments in new infrastructure components along with the expansion of existing facilities.
What has been publicly discussed includes the following:
New AI Server Manufacturing Facility in Houston, Texas
A significant portion of this investment is allocated to constructing a 250,000-square-foot manufacturing facility in Houston, Texas.
Scheduled to open in 2026, this facility will produce servers designed to power Apple Intelligence, the company's AI system.
These servers, previously manufactured abroad, will now be assembled domestically, enhancing energy efficiency and security for Apple's data centers.
The project is expected to create thousands of jobs in the region.
Expansion of Data Center Capacity
Apple plans to increase its data center capacity in several states, including North Carolina, Iowa, Oregon, Arizona, and Nevada.
This expansion aims to support the growing demands of AI applications and services, ensuring enhanced performance and reliability for users.
Doubling the U.S. Advanced Manufacturing Fund
To further support innovation and high-skilled manufacturing jobs, Apple is doubling its U.S. Advanced Manufacturing Fund from $5 billion to $10 billion.
This fund will promote advanced manufacturing and skills development across the country, including a multibillion-dollar commitment to produce advanced silicon at TSMC's Fab 21 facility in Arizona.
Launch of the Apple Manufacturing Academy
Apple is establishing the Apple Manufacturing Academy in Detroit, Michigan.
This academy will collaborate with small and medium-sized businesses to implement AI and smart manufacturing techniques.
It will offer free in-person and online courses, providing workers with essential skills like project management and manufacturing process optimization.
How Does This Compare to the $500 Billion Stargate Investment?
The Stargate Project is a monumental initiative aimed at bolstering the United States' artificial intelligence infrastructure.
Announced on January 21, 2025, by President Donald Trump, this joint venture involves leading technology companies and is set to invest up to $500 billion over the next four years.
Announced objectives include:
- Strengthen U.S. Leadership in AI: By developing state-of-the-art AI infrastructure, the project aims to secure and enhance America's position at the forefront of AI innovation.
- Economic Growth and Job Creation: The initiative is expected to create over 100,000 jobs, contributing significantly to the U.S. economy.
- National Security: Enhancing AI capabilities is also seen as a strategic move to protect national interests and security.
Key Players in the Stargate Project
Unlike the Apple announcement, this half a trillion dollar program has four primary investor partners, with Masayoshi Son, CEO of SoftBank, serving as chairman of the project.
The four partners and their roles consist of:
- OpenAI: Co-lead partner responsible for operational aspects.
- SoftBank: Co-lead partner overseeing financial responsibilities.
- Oracle: Equity funder and key technology partner.
- MGX: Equity funder contributing to the project's investment pool.
The project announcement also highlighted key technology partners who would be bringing their expertise to support the key technological domains essential for the project's success. These include
These partners bring expertise in various areas, including infrastructure development, data centers, energy, cloud, AI and high-performance computing.
That's A Lot of Data Centers
As of the announcement, the Stargate Project plans to construct 20 data centers, each spanning half a million square feet.
Construction has commenced in Texas, with further sites under evaluation nationwide.
The data center construction isn’t taking place in a vacuum. Recognizing the substantial power requirements, the project includes developing dedicated electricity generation facilities to support these data centers.
The Stargate Project's Energy Outlook
In many ways, building the necessary energy infrastructure can be considered the biggest roadblock to future development and as yet, no specific energy-related announcements have been made. Given the substantial energy requirements of these facilities, the project plans to integrate various dedicated electricity generation sources, including:
On-Site Natural Gas Plants: The inaugural data center in Abilene, Texas, will feature an on-site natural gas plant with a capacity of approximately 360.5 megawatts (MW). This facility is designed to provide primary and backup power exclusively for the data center, ensuring a reliable energy supply independent of the local grid.
Solar Energy and Battery Storage: To enhance sustainability, the project intends to incorporate renewable energy sources. SB Energy, a subsidiary of SoftBank, is slated to develop solar energy facilities complemented by battery storage systems. This approach aims to reduce reliance on fossil fuels and promote environmental responsibility.
Natural Gas Power Plants by Energy Partnerships: Collaborations with energy companies, such as Chevron and GE Vernova, are in place to construct natural gas power plants connected to data centers across various U.S. regions, including the Southeast, Midwest, and West. These plants are expected to commence operations by the end of 2027, addressing the escalating electricity demands driven by AI development.
Comparing the Investments
Project spending for Stargate has already started as an initial investment of $100 billion has been initiated to kickstart the project.
This equates to 20% of the announced investment of up to $500 billion over the next four years, making it one of the largest private-sector investments in AI infrastructure to date.
Unlike the Apple investment, which is targeted at moving Apple production to the US and improving the technical future of Apple Computing, the Stargate Project is being positioned as a critical step toward re-industrializing the United States, ensuring technological sovereignty, and reducing reliance on foreign cloud service providers.
It also aims to provide a strategic capability to protect national security and maintain a competitive edge in the global AI landscape.
While the project represents a significant commitment to advancing AI infrastructure, with substantial investments and strategic partnerships, a significant motivation for the government involvement in the announcement is to focus on reinforcing the United States' leadership in the field.
So That’s a Trillion Dollars in Digital Infrastructure. What Else Is Going On in 2025?
- Amazon: Pledged $100 billion towards AI data centers.
- Alphabet (Google): Committed $75 billion.
- Meta (Facebook): Planning to spend up to $65 billion.
- Microsoft: $80 billion in 2025 for AI data centers.
- DAMAC Properties: $20 billion investment in US data centers.
- Taiwan Semiconductor Manufacturing Co. (TSMC): Announced $100 billion investment in manufacturing facilities in the US.
These US-targeted investments represent some $450 billion in planned, near term investments in US data center and technology.
The huge scale of these announcements has the effect of overshadowing what are still significant investment announcements, such as Blue Owl Capital and their development partners securing $2.3 billion in funding for a number of projects.
We should also mention that there were significant investment announcements in the last quarter of 2024, with over $25 billion promised for additional data center development, led by Equinix and their $15 billion announcement of a joint venture to build hyperscale data centers.
And It’s Not Just in the U.S.
Chinese multinational e-commerce and technology leviathan Alibaba announced a $53 billion investment in data centers over the next three years.
French President Emmanuel Macron announced a €109 billion investment in artificial intelligence to strengthen Europe's presence in the industry, as discussed at last month's Paris AI summit. The funds will be directed towards building AI infrastructure, including computing clusters and data centers compatible with France's nuclear power-generated electricity.
Other significant investments are being made in the UK and APAC with new announcements being made almost weekly.
These investments announced as highlighted here are primarily focused on new construction, There of course have also been announcements about upgrades and refreshes of existing facilities as well as collateral investments in related industries, such as nuclear power.
Despite some concerns expressed recently that investment in the industry was shrinking, it seems clear that the long-term forecast for data center and technology investment remains a robust one.
