AI Is Building the Next Generation of American Prosperity

Artificial intelligence is emerging as a major driver of American economic growth, attracting billions of dollars in private investment, creating demand for skilled workers, and opening new opportunities for businesses across the economy. While much of the public discussion has focused on the potential for automation to eliminate jobs, recent economic data and employment projections suggest that AI could produce substantial gains in investment, productivity, and employment.

The expansion of AI is already supporting construction activity and demand for industrial infrastructure. Looking ahead, research from the McKinsey Global Institute suggests that economic growth and technological advancement could generate more jobs than automation displaces over the next decade.

These developments offer an encouraging picture of how technological innovation can strengthen the American economy.

AI Could Generate Millions of Additional Jobs

Artificial intelligence has prompted widespread predictions of job losses as businesses adopt technology capable of performing tasks previously handled by employees. However, research from the McKinsey Global Institute suggests that the economic expansion associated with technological advancement could generate more labor demand than automation eliminates.

McKinsey projects that automation and other economic changes could reduce U.S. labor demand by the equivalent of 36 million full-time workers between 2025 and 2035. During the same period, economic growth and expanding industries could increase demand by 41 million full-time-equivalent workers, producing a potential net gain of 5 million.

The research also indicates that much of the adjustment could occur within existing occupations. Approximately 25 million of the 36 million positions facing declining demand could be offset by growth within the same occupations, while another 11 million workers may need to transition into growing fields.

These estimates reflect the potential for technological innovation to create new opportunities throughout the economy. As AI improves productivity, businesses can expand output, lower operating costs, and direct additional resources toward investment and hiring.

Although workers will need to adapt as occupations evolve, the projections suggest that AI could support a larger and more productive American workforce over time.

AI Investment Is Supporting American Reindustrialization

The economic benefits of AI are already visible in the rapid expansion of data center construction, which is generating demand for skilled labor, industrial equipment, and electricity infrastructure.

According to U.S. Census Bureau data analyzed by EconVitals, inflation-adjusted data center construction spending increased 64.5% over the year through August 2026. By comparison, manufacturing construction spending declined 23.9%, residential construction fell 9.6%, and overall nonresidential construction decreased 5.9%.

Data centers require substantial investments in buildings, electrical systems, cooling equipment, and computing infrastructure. Their development supports employment for electricians, plumbers, engineers, equipment operators, and other skilled trades, while creating additional demand for the businesses that manufacture and supply industrial equipment.

The expansion of these facilities also encourages investment in electricity generation and transmission infrastructure, creating opportunities for energy producers, utilities, and equipment manufacturers.

AI investment is helping drive a new period of American industrial development, with technology companies directing capital toward large domestic infrastructure projects. The resulting economic activity extends well beyond the technology industry, supporting construction firms, manufacturers, energy companies, and workers throughout the supply chain.

Expanding AI Infrastructure Creates New Opportunities

The continued growth of artificial intelligence will require additional computing capacity and supporting infrastructure. With more businesses incorporating AI into their operations, demand for data centers is expected to remain an important source of private investment.

Public attitudes toward data center development, however, have not kept pace with the growing use of AI. An October 6 Wall Street Journal opinion letter cited figures showing that more than half of American workers use AI, while roughly 70% of Americans oppose data centers being built near their communities.

Making suitable vacant federal land available for private data center development could provide a practical way to accommodate this growth while reducing conflicts with residential neighborhoods.

Federal agencies could identify properties with sufficient access to electricity, water, and transmission infrastructure and make them available through competitive leasing arrangements. Expanding access to these locations would provide businesses with additional development opportunities and encourage further private investment.

Federal permitting reform could also help accelerate the construction of data centers, electricity generation facilities, and transmission infrastructure. Reducing unnecessary regulatory delays would allow companies to respond more efficiently to growing demand for computing capacity.

As AI becomes more widely adopted, expanding the infrastructure needed to support it will be an important part of sustaining investment and productivity growth.

CFE Takeaway

Artificial intelligence is creating new opportunities for American workers and businesses through increased productivity, private investment, and industrial development. McKinsey's projections suggest that growing labor demand could exceed automation-related declines by 5 million full-time-equivalent positions through 2035, while the 64.5% increase in data center construction spending demonstrates the investment already underway.

The Center for a Free Economy supports policies that encourage technological innovation and allow private businesses to invest in the infrastructure needed to expand AI. Making suitable federal land available for data centers and reducing unnecessary permitting barriers would help sustain this growth while providing additional development options outside residential communities.

AI has the potential to strengthen American competitiveness, increase productivity, and create employment opportunities across a wide range of industries. Federal policy should encourage that growth by removing obstacles to private investment and allowing American businesses to lead in the development and adoption of new technologies.