U.S. spending on information processing equipment reached $752 billion in the second quarter, surpassing real private residential fixed investment of $748 billion, according to federal data reported by Fortune on Sept. 20. The shift marks a historic milestone: for the first time, the nation is investing more in the machines that power artificial intelligence than in the homes people live in. While computing spending has surged 51% from its early 2021 peak, residential investment has fallen 18%, underscoring a dramatic reallocation of capital toward AI infrastructure.
Investor Daniel Kaufman, founder of the permanent capital holding company Kaufman & Company, said Wednesday that this spending imbalance should fundamentally change how AI campuses are planned. Kaufman argues that housing for the electricians, operators, and families who support these facilities must be budgeted from the outset, rather than left to chance. "For the first time, this country is putting more money into the machines that run AI than into the homes people live in," Kaufman said. "I'm not here to fight that capital. We develop data centers ourselves. But every campus needs electricians, operators and their families living within a reasonable drive, and right now almost nobody is budgeting for those homes. That is how you lose a town hall, and it's how you lose a workforce."
The call comes amid growing local resistance to data center development. In Utah, residents are challenging a county's approval of a $10 billion data center campus, and El Paso adopted new rules for data centers this summer. These pushbacks highlight community concerns over land use, resource consumption, and the lack of tangible local benefits. Kaufman & Company has a stake on both sides of the issue. Its venture arm, Kaufman Ventures, backs ServerDomes Global, which announced plans in July for geodesic dome data centers in Utah and El Paso, Texas, including a 24,000-acre site in El Paso. The domes are designed to use about 90% less water than conventional facilities, addressing one of the most contentious environmental issues.
On the housing side, Kaufman's platform includes DK Homes, Design Build Affordable, and the factory-built Mr Good Container Homes, and it works with Oldivai, an aligned, independently led workforce housing partner. This integrated approach aims to create communities around data centers, not just isolated industrial sites. "Communities are right to ask what they get in return for hosting this infrastructure," Kaufman said. "Our answer is that we don't want a blighted site with a fence around it. We want to build housing and other uses around the domes, and we want the people who keep those buildings running to be able to live near them. An investor who treats the housing as somebody else's problem is going to find the power, the permits and the people all harder to get."
The implications of this announcement extend beyond one company. As AI infrastructure spending continues to outpace housing, developers who ignore workforce housing may face permitting delays, community opposition, and labor shortages. Kaufman's model suggests that integrating housing into data center plans could be a competitive advantage, ensuring that the workforce is available and that local communities see direct benefits. With more than $2 billion in project value delivered and over 10,000 housing units financed or developed, Kaufman & Company's experience lends weight to the argument. The milestone of computing spending surpassing housing is not just a statistical curiosity; it signals a structural shift in the economy that demands a corresponding shift in how infrastructure is built.
