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Our data insight on data center costs indicated that the three biggest cost components are the servers, the facility, and the networking infrastructure. The growth in spending on these categories is now a meaningful component of US GDP. We approximate US-based investment in the data center buildout in each of these three categories:
- Above trend spending on computers and peripherals (BEA)
- Spending on data center construction (Census)
- Spending on networking equipment (own estimate)
We use national economic statistics when feasible. Networking equipment is still too small a share of the investment series on communications equipment to obtain as clear a growth signal as we can from the compute and peripherals series, so we construct our own estimate based on market research.
Analysis
To estimate data center share of computers and peripherals, we project the 2015-2022 trend in C&P share of GDP through to the present and attribute growth above trend to AI. This is similar to the methodology in Brandsaas et al (2025) which validated the NIPA C&P data with microdata on project plans. Growth in C&P since mid-2023 also closely tracks both net imports of GPUs to the US (HS series 8471.50 and 8473.30) and growth in the US-customer share of Nvidia revenues.
To estimate data center networking we use the IDC’s Worldwide Quarterly Ethernet Switch Tracker. IDC reports Arista’s share of the global data center Ethernet switch market (19% in Q3 2025) and the DC segment share of Arista’s own switch revenue (91%). Combined with Arista’s quarterly revenue from SEC filings, this lets us back out the global DC Ethernet switch market (~$36 billion annualized in Q3 2025). We scale by 70% to estimate the US share, consistent with approximate hyperscaler capex geography. We add Nvidia InfiniBand switches to this estimate, the main non-Ethernet networking gear that sits standalone in data center racks. Nvidia doesn’t break out InfiniBand separately, so we estimate it by interpolating Dell’Oro’s estimates of published AI back-end fabric market size combined with their reported InfiniBand share of that market.
Assumptions and limitations
We construct our own networking estimate rather than using BEA’s Communications Equipment line (FRED B936) because that series bundles data center switching with broader telecom and enterprise networking that doesn’t allow us to isolate AI-related spending.
The C&P category includes non-data-center business IT spending. Some residual non-DC growth may be embedded in the “above-trend” portion, or alternatively, companies may be pulling back on non-AI C&P spending.
All figures are nominal. Real C&P growth is larger than nominal growth due to quality improvements in chips and servers, while data center construction cost inflation makes real construction growth slower than nominal.