For years, most investors viewed AI through a narrow lens.
They focused on semiconductors, cloud computing, and large language models (LLMs) – the digital side of the revolution.
That’s been a winning strategy. The companies supplying GPUs and compute power have generated huge returns. Those who have followed our recommendations are doing better than most hedge funds.
What’s beginning now is something far larger. It’s the physical build-out of the AI era.
This transformation will demand hundreds of gigawatts of new power, millions of miles of fiber-optic cable, and millions of square feet of new data-center capacity. It will require upgraded transmission lines, expanded substations, and an army of electricians, welders, and construction crews to make it all possible.
Up until now, AI developers have been able to squeeze their workloads into existing infrastructure.
That era is over.
The next generation of AI “factories” – the clusters that will power artificial general intelligence (AGI) and superintelligence (ASI) – can’t fit within today’s grid. They require an entirely new industrial base.
We’re entering a national infrastructure transformation, the largest since the interstate highway system. Trillions of dollars will be deployed. And not just on the data centers themselves, but on every auxiliary service that supports them: energy, transportation, materials, and maintenance. And then for housing for the workers, restaurants, and other businesses.
This spending will ripple through the entire economy. It will spark new economic centers around emerging AI hubs… and breathe new life into old industrial towns left behind by globalization.
The build-out won’t just push Big Tech stocks to new highs. It will lift the broader economy, create millions of skilled jobs, and usher in a new wave of prosperity across the country.
And this, of course, will be great news for all kinds of companies… And people who invest in the right companies will see their portfolio soar.
Just as the railroads in the 1800s and the interstates in the 1950s reshaped the geography of American growth, AI is redrawing the economic map once again.
For decades, prosperity clustered along the coasts. We saw finance in New York, biotech in Boston, aerospace in Seattle, and computers in Silicon Valley.
But those regions are now crowded and power-constrained. That’s why the next phase of the AI boom is moving inland towards the regions where power and land are abundant.
We’ve talked often about the Stargate data-center complex rising near the shale fields of West Texas. But we’re also seeing new projects across the Great Lakes and the Rust Belt. And it’s rejuvenating America’s industrial heartland.
Last week, we covered how the hyperscalers are on track to invest $1 trillion annually by 2028 in AI infrastructure.
Source: Marvell
It’s worth noting that the forecast near the start of the year was that spend would hit $1 trillion by 2029. That’s already been pulled in by a year. And today’s numbers are already being revised higher as new contracts and joint ventures are announced almost weekly.
When we combine that with the broader ecosystem – from energy to construction – McKinsey estimates global AI infrastructure investment will reach $7.9 trillion between 2025 and 2030.
Source: McKinsey
Meanwhile, Apollo Global Management found that AI capital spending already adds roughly one percentage point to U.S. GDP growth.
This is money that will get pumped into the economy instead of sitting idle in corporate treasuries. It’s money flowing into wages, materials, and productivity that will spur real economic growth… And that’s before we even feel the benefits of AGI and ASI.
Through the multiplier effect of money, every dollar invested in AI infrastructure multiplies through the real economy. The same dollar pays a construction crew, which pays local suppliers, which spends money at restaurants, schools, and other small businesses.
Trillions of dollars will ripple through local communities over the coming decade. And for the first time in decades, the benefits won’t be limited to the coasts. They’ll flow to the workers, builders, and entrepreneurs in America’s heartland.
To understand where we’re headed, it helps to look at where this trend began.
Northern Virginia’s “Data Center Alley” has been the center of the internet for decades. The region’s rise started in the 1960s when ARPANET – the Pentagon-backed Advanced Research Projects Agency Network – first set up a transfer network between Washington, D.C., with major universities. This would create the foundation for future data center networks across what is now Data Center Alley.
Then, in 1992, the Metropolitan Area Exchange-East program established the first internet exchange points. That network speed and connectivity drew early giants like AOL, Yahoo, and WorldCom to build their data infrastructure there.
Today, roughly 70% of all global internet traffic still passes through Northern Virginia. At the epicenter is Loudon County, home to about half of Virginia’s data centers.
And the economic impact has been enormous.
County officials report that data centers now generate $1 billion in annual tax revenue, funding roughly one-third of the county’s budget. That windfall has allowed local leaders to cut residential taxes by about $3,500 per household.
And Virginia’s momentum isn’t stopping. The industry could soon add another 74,000 jobs and $9.1 billion in GDP to Virginia’s economy every year.
This is what we could consider calling “trickle-down technology.” It starts with data centers, but then the tax revenue from the data centers and new workers leads to increased funding for infrastructure, schools, law enforcement, and public services.
But even a boomtown can reach its breaking point.
Land prices in Loudoun County have surged 45% in just one year. Housing has become prohibitively expensive. And as new data centers come online, Virginia’s power demand could triple in the coming years.
The grid is already straining. Dominion Energy recently declared parts of Northern Virginia a “constrained area” – effectively placing a moratorium on new grid connections until 2028 or later.
Silicon Valley faces a similar problem on the opposite coast. California’s restrictive energy policies, sky-high real estate costs, and regulatory hurdles have made expansion nearly impossible.
The result? The AI buildout is leaving the coasts behind.
The new frontier for AI infrastructure lies inland. Mostly in states that offer what the coasts can’t: cheap power, open land, and pro-growth policies. Here’s a chart of some of the more popular areas.
Ohio has become the model to look toward.
With its business-friendly incentives, cooler climate, and proximity to the Great Lakes for water used to cool the latest GPUs, Ohio – particularly around Columbus – has emerged as one of the hottest new data-center hubs in America.
The Ohio Chamber of Commerce estimates that data centers supported 95,000 jobs and $12 billion in GDP in 2024 alone. By 2030, those figures are projected to climb to 132,500 jobs and $21 billion.
Even the tax incentives pay for themselves. For every $1 Ohio provides in credits, the state receives roughly $2 in return, generating over $1 billion a year in new tax revenue.
It’s a powerful reminder that when technology capital meets industrial capacity, prosperity follows.
We often hear about the Stargate project rising from the shale fields of West Texas – a $500 billion complex that will be one of the largest AI compute clusters.
But a lesser-known story is unfolding east of there, across Southwestern Pennsylvania. The region that once fueled America’s steel and coal industries is now being reborn as an AI power hub.
Three major independent data-center projects were announced earlier this year, representing up to 6.5 gigawatts of total capacity. This is one of the largest concentrations in the nation.
Together, they’ll bring nearly $10 billion in new investment and create thousands of construction jobs, followed by more than a thousand permanent, high-skill positions once operational.
And unlike the coasts, they won’t have to wait years for power hookups. These facilities will tap directly into the region’s vast natural-gas network, turning legacy energy infrastructure into a 21st-century growth engine.
That’s the genius of the AI buildout. It’s repurposing America’s industrial past for its digital future.
And the rest of the state is also seeing private capital pile in. Blackstone has pledged $25 billion to redevelop the site of a former steel mill into a modern AI campus. Amazon has committed another $20 billion, and CoreWeave plans to invest $6 billion across northeastern Pennsylvania.
We’re seeing the same story repeat from Minneapolis to Des Moines to Mount Pleasant, Wisconsin.
Vacant office towers are being converted into smaller, low-latency inference centers.
Nuclear plants once slated for decommissioning are being restarted to power next-generation AI clusters.
And companies like Meta, Microsoft, and xAI are pouring billions into new facilities that will anchor local economies for decades.
This is a story Jeff has been following for a long time. And he’s even visited a few of these sites.
Jeff in front of an AWS data center | Data Center Alley, Virginia
If you live near any of these projects, please write in and let us know what you’re seeing in your area and how the data centers are impacting you and your community – whether you hate it or love it.
AI is redistributing wealth across America.
It’s reviving towns that globalization hollowed out and giving new purpose to power plants, factories, and industrial corridors long written off.
Yes, automation will displace some jobs, as every great wave of innovation has. But at Brownstone Research, we believe AI will create far more opportunities than it destroys.
Because behind every data center are thousands of human hands: the electricians, machinists, truck drivers, and engineers who make the digital world run.
We’re witnessing the next great American buildout. This isn’t just a technology story anymore. It’s the beginning of an economic supercycle.
What began as a race for GPUs has become a national reindustrialization project, spreading prosperity from the shale fields of Texas… to the Great Lakes of Ohio… to the steel towns of Pennsylvania.
Every dollar invested in AI infrastructure flows through real American industries – steel, cement, copper, energy, transportation, and other trades.
This will provide stable income for thousands and millions of people in the coming years. And it will propel the economy and the stock market much higher.
That’s why, despite any short-term market jitters, we’re staying the course. Because what’s taking shape before our eyes will be the biggest industrial buildout the country has ever seen.
As Jeff likes to say, this is only the beginning.
Regards,
Nick Rokke
Senior Analyst, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
