The rapid expansion of AI-driven data centers is straining electricity, materials, and labor supplies, which Fordham economics professor Marc Conte says can raise energy costs for local businesses and ultimately lead to higher electric bills and even food prices for consumers.
Following approval of these contracts, construction begins swiftly, increasing demand for not just electricity, but raw materials and labor. With supply stretched, these resources become more precious, and more expensive, for other businesses in the areas surrounding data center construction, according to Fordham University economics professor Marc Conte.
“The urgency with which they’re trying to engage in this massive expansion, that also is going to be inflationary,” Conte told Fortune, “because they’re willing to pay well above current price to get something done sooner, and so that can trickle down.”
Conte likens the rapid data center expansion to a city’s decision to build a new sports stadium. While the payoff potential could be an economic boon, the sacrifices needed to finance the undertaking are not without risk to an area’s millions of residents.
“We’re putting a lot of trust into these companies,” Conte said. “We’re allowing them to do things that they are admitting are going to be incredibly disruptive, with disproportionate burdens falling across [households].”
