Deutsche Bank's Brett Ryan: data-center moratoriums may deflate AI bubble

The remarks from Deutsche Bank's Brett Ryan come as the AI buildout faces a new kind of constraint: political permission. Bloomberg reported that monthly construction spending on data centers has almost doubled over the last 12 months, to nearly $100 billion on an annualized basis. That surge had given the US economy its biggest boost on record from information processing equipment and software, eclipsing the contribution at the peak of the 1990s dot-com boom.

With the midterm elections, that picture may change. Goldman Sachs estimates cited by Bloomberg put about 45% of planned US data-center capacity in states where newly elected Democrats campaigned on limits. Texas alone accounts for 25% of the total. In Texas, governor-elect Gina Hinojosa has vowed to halt new approvals; in Georgia, Keisha Lance Bottoms campaigned on a statewide pause; and in Ohio, Amy Acton has proposed stricter conditions on new projects.

Economists quoted by Bloomberg do not foresee an immediate pullback, because much of the capacity coming online next year is already under construction. The election results could matter more for the 2028 outlook if groundbreaking on new facilities slows. Sarah Bianchi of Evercore ISI told Bloomberg she expects state moratoriums to last no more than a year. The overall message from the economists is that limiting construction could act as a natural brake on the AI investment boom, which could help prevent a potential bust.