Goldman's Sachs sees US data center expansion continuing despite local opposition

Yesterday 19:30

By: Azzat Manal

Goldman's Sachs sees US data center expansion continuing despite local opposition

Goldman Sachs expects the expansion of data centers across the United States to remain strong through 2027, despite growing resistance from local communities concerned about electricity consumption, infrastructure pressure and the broader impact of large-scale computing facilities.

The investment bank forecasts that demand for data center capacity will continue to be supported by the rapid development of artificial intelligence. Advanced AI systems require substantial computing power for both model training and deployment, encouraging technology companies and infrastructure operators to accelerate investment in specialized facilities.

Goldman Sachs has raised its estimate for total US data center capacity at the end of 2026 by 5 gigawatts to approximately 64 gigawatts. At the same time, its forecast for the end of 2027 was reduced by 5 gigawatts to around 90 gigawatts, suggesting that expansion is still expected to continue even as some projects encounter delays or stronger local scrutiny.

The growing footprint of data centers has increasingly become an issue for communities hosting new facilities. Large campuses can require significant amounts of electricity and may place additional demands on transmission networks, generation capacity and other public infrastructure. In some areas, concerns have also emerged over the potential effects on electricity costs and the availability of local resources.

Despite these challenges, Goldman Sachs anticipates a substantial increase in electricity consumption from the data center sector. Its projections point to a 38% rise in power demand during 2026, equivalent to roughly 12 gigawatts of additional consumption. Demand could increase by a further 17 gigawatts in 2027 as investments in artificial intelligence and cloud computing continue.

The trend highlights the growing connection between the technology and energy sectors. As companies race to develop increasingly powerful AI applications, data centers are becoming critical components of the digital economy, while utilities and grid operators face the challenge of providing enough reliable electricity to support their growth.

The expansion is also reshaping investment priorities in the US power market. New generation projects, grid upgrades and transmission infrastructure are increasingly being considered alongside technology-sector developments, particularly in regions attracting major data center investments.

Goldman Sachs' outlook suggests that local opposition may influence where and how quickly new facilities are built, but is unlikely by itself to halt the broader expansion of US data center infrastructure. The pace of development will ultimately depend on the balance between rising demand for AI computing, available power capacity, regulatory decisions and the ability of local and national infrastructure to accommodate the sector's growth.