Derek Thompson Warns AI Data Centers Crowd Out Housing

Writer Derek Thompson argues that the rapid expansion of artificial intelligence infrastructure is creating a crowding-out effect on essential public investments. Speaking on the Channels podcast, Thompson noted that the surge in data center construction is diverting resources away from the construction of hospitals, offices, housing, and manufacturing facilities.

To support this claim, Thompson cited data from Harvard economist Jason Furman showing that data center construction increased by more than 60% over the last year, while other critical infrastructure sectors saw a decline. Thompson stated that "houses for people are more important to emphasize as a matter of public policy than houses for chips."

Thompson also discussed the economic incentives driving his own work since moving from The Atlantic to Substack in 2025. He explained that the high market demand for AI-related content provides the financial stability required to fund his less profitable social analysis, describing the disparity as "dimes for analysis, dollars for facts, and Benjamins for facts about artificial intelligence."