The US President Donald Trump is betting big on artificial intelligence (AI) and the data centers driving its development. Just hours after his Inauguration in January, one of his first major announcements was an investment of as much as $500 billion in AI infrastructure by SoftBank Group, OpenAI and Oracle Corp. The AI data center industry too is thriving in America, fueled by a fierce competition among tech giants like Microsoft Corp, Amazon.com Inc, and others vying for AI supremacy — both against each other and global rivals like China.
According to a report in Bloomberg, the surge has become a significant engine of US economic growth, contributing as much as 0.3% to GDP last year, roughly $100 billion, as per JPMorgan Chase & Co. analysts. With companies like Google and Meta Platforms Inc. unveiling projects worth hundreds of billions in recent months, Bloomberg Intelligence predicts investment could soar 64% this year and climb another 14% in 2026, peaking at $135 billion by 2027.
But some analysts are seeing a problem in President Donald Trump’s ‘AI ambitions’, and it is called Trump Tariffs. They reportedly fear that the President Trump’s aggressive tariff policies could saddle US businesses with steep new costs as they invest hundreds of billions into this booming sector. As constructing these facilities is only half the battle. Equipping them with cutting-edge hardware — much of which is imported — exposes the industry to the ripple effects of Trump’s trade policies.
Tariffs threaten supply chain for American companies
As the Bloomberg report points out, Trump has already slapped a 20% duty on imports from China and wavered on a 25% tariff for Mexico, the two largest suppliers of U.S. computer equipment. Steel, aluminum, and other critical materials have also been hit, with more tariffs looming for Asian nations and key components like semiconductors. Niccolo Lombatti, a digital infrastructure analyst at BMI told Bloomberg that “a broader application of tariffs globally could pose a significant downside risk to the U.S. data center market, given its reliance on a global supply chain.”
These added costs might not faze tech titans chasing AI breakthroughs — viewed as the most transformative technological leap of our time. But after China’s DeepSeek model shook markets with a cheaper alternative, tariffs represent yet another challenge, potentially inflating project budgets or delaying timelines if supply chains falter.
White House’s plan to tackle Tariff pain
The White House counters that slashing energy costs through deregulation and boosted production will cushion these blows, a critical factor given power’s outsized role in data center expenses. Still, the broader reliance on foreign machinery complicates Trump’s goal of reviving domestic manufacturing while shrinking the trade deficit.
Tech giants like Microsoft, Amazon, Google, and Meta—flush with cash—recently boosted capital spending projections by 32% from last year, shrugging off DeepSeek’s disruption. But then as trade war tensions ripple through the economy, it is tough for any industry to be immune. “Tariffs are taxes on imports, and taxing imports increases prices,” told Patrick Lozada of the Telecommunications Industry Association to the publication. “That’s going to be true in data centers, just the same as it is for consumer products,” he added.
