UBS CEO Warns of an AI Buildout Slowdown as Data Center Construction Hits a Record

Spending on US data center construction has never been higher, but the boom may face a test in Washington. UBS CEO Sergio Ermotti said that the Democratic midterm sweep may slow the AI buildout.

That spending reached a $96.5 billion annual pace, up 90% from a year earlier. Those figures measure work done on projects already underway, so new groundbreakings offer an earlier read on any pullback.

Fewer Shovels in the Ground Before the Votes Were Counted

ConstructConnect, a construction data firm, tracks those groundbreakings each month. It recorded $9.4 billion in new data center starts in September, less than half of August’s record $25.8 billion.

A single month does not make a trend, since a few large projects can swing the total. The firm still expects 2026 starts to top $180 billion. It also tracks $74.8 billion in planned projects due to break ground within six months.

Whether those projects go ahead matters beyond data centers, because overall construction spending just posted a sharp drop.

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Data Center Construction Is Holding Up a Sagging Building Market

Total US construction spending fell 1.9% in September to a $2.19 trillion annual rate, according to the Census Bureau. That was the sharpest monthly drop since April 2020.

Data center spending rose 8.6% in the same month, according to the Associated General Contractors of America. The Kobeissi Letter noted it has now grown more than 60% year over year for four consecutive months.

“Since the start of 2024, data center construction spending has nearly quadrupled,” it added.

General office construction slipped 8% from a year earlier to $46 billion, near its weakest level since January 2016. The gap between the two categories has widened to a record $50.5 billion.

With one category carrying the sector, a slowdown in data center projects would weigh on total spending.

Ermotti tied that risk to the midterm elections. Democrats won control of Congress, and candidates favoring stricter AI oversight took key races.

“The political developments in the US may also trigger a slowdown in building up capacity,” Ermotti, CEO of UBS, told Bloomberg.

His comments arrive days after a $2.3 trillion Nasdaq rout tied partly to fears of tighter AI rules. Still, he called AI a strong growth engine over the medium to long term, while warning it may stay volatile near term.

October data, including the Census release due December 1, still predates the vote. November figures, the first full month after the election, will show whether developers start holding back. 

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