The warehouses of computer servers powering artificial intelligence are growing so fast that their electricity appetite is beginning to reshape household budgets.
The CEO of the company supplying most of the hardware in those facilities just laid out a projection that makes the current spending look modest by comparison.
Jensen Huang, who cofounded Nvidia (NVDA) and still runs the company, has told investors across multiple recent earnings calls that he expects global annual data-center capital expenditure to reach $3 trillion to $4 trillion by the end of the decade, CNBC reported.
On Nvidia’s first-quarter FY27 earnings call on May 20, Chief Financial Officer Colette Kress said the company expects to reach that target by the end of this decade.
Nvidia’s $4 trillion forecast dwarfs the Wall Street consensus
The gap between Huang’s projection and what most of Wall Street expects is striking and reveals the extent of disagreement about the trajectory of artificial intelligence spending over the next several years.
Needham analyst Laura Martin noted in a recent research report cited by CNBC that industry participants expect hyperscale cloud providers to reach about $1.03 trillion in annual capital expenditure by 2028, making Huang’s figure roughly four times the prevailing consensus.
Martin described Huang’s forecast as different from the scenarios outlined by the cloud providers themselves and more ambitious in scope.
Bank of America analyst Vivek Arya now projects the total addressable market for AI data-center systems will reach approximately $1.7 trillion by 2030, according to Investing.com, up from a prior estimate of $1.4 trillion. The 21% revision reflects how quickly spending assumptions are shifting.
Nvidia’s growth supports the scale of Huang’s ambition
Huang speaks from the industry’s center, where he has a front-row view of its trajectory.
Nvidia posted $81.6 billion in revenue during its most recent quarter, an 85% increase from the same period a year earlier, according to the company’s first-quarter fiscal 2027 results. Data-center revenue alone surged 92% year over year to $75.2 billion.
Nvidia’s market capitalization currently sits near $4.9 trillion, trading neck-and-neck with Apple, as CNBC reported. Apple briefly overtook Nvidia in intraday trading on July 17 for the first time in more than a year before Nvidia reclaimed the lead by the close, according to Bloomberg data.
Morgan Stanley analyst Joseph Moore wrote in a March research note cited by TipRanks that Nvidia’s stock has stalled despite improving fundamentals, weighed down by doubts about its longevity.
For the last two quarters, NVIDIA has not moved while business has continued to strengthen — a function of concerns about the durability of current growth.
If Huang’s spending forecast proves accurate and Nvidia maintains even a reduced share of that market, the math for a $20 trillion valuation becomes straightforward, since the company would only need to roughly quadruple from its current level.
Joseph Moore noted that Nvidia accounts for approximately 85% of AI processor revenue, with AMD at less than 5% and custom-designed chips from hyperscalers at just above 10%, noted Investing.com.
Hyperscalers are signing three-year supply contracts, some with full upfront prepayments, which Moore described as a durability signal that is hard to square with the idea that spending will slow down soon.
NVIDIA guided to $91 billion in second-quarter FY27 revenue, roughly 95% higher than the year-ago quarter, with the outlook assuming no data center compute revenue from China due to ongoing export restrictions.
Nvidia’s explosive AI growth and dominant market position strengthen Jensen Huang’s bold vision of a potential $20 trillion company valuation.Bloomberg/Getty Images
How the AI infrastructure wave hits your household budget
For most people, Nvidia’s revenue figures and market-cap projections might feel distant from daily life, but the infrastructure buildout behind those numbers is already producing costs that are landing on kitchen tables across the country.
Goldman Sachs analysts Manuel Abecasis and Hongcen Wei forecast that consumer electricity inflation will run at approximately 6% through 2026 and 2027, before easing to around 3.5% in 2028 as natural gas prices decline.
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Data centers account for roughly 40% of total electricity demand growth over the next five years, the Goldman Sachs research team found, and the burden does not fall equally across income levels.
“The income and spending drags will likely be larger for lower-income households because electricity accounts for a greater share of their spending,” Abecasis wrote in a Goldman Sachs research note, adding that households near large clusters of data centers face even steeper increases.
Linglan Wang, director analyst at Gartner, projects worldwide data-center power demand will rise 27% in 2026 alone, reaching 132 gigawatts, and could climb to 290 gigawatts by 2030. Wang attributes the scale of the buildout to the unprecedented pace of generative AI adoption.
The broader economic ripple effects of AI spending
Higher electricity prices are not the only channel through which this spending wave reaches consumers.
Goldman Sachs analysts found that rising utility costs will increase core inflation by 0.1% in both 2026 and 2027, with the largest fraction of that uptick flowing into medical services, food services, and secondary pass-through into new vehicle and clothing prices as businesses absorb higher energy costs.
Consumer spending growth could decline by 0.2% through 2027 as higher electricity bills reduce disposable income, the Goldman team projected, contributing to a 0.1% drag on overall economic growth.
Nvidia’s China wild card could amplify the growth trajectory
One factor not yet reflected in Nvidia’s financial guidance is the potential reopening of its Chinese market.
Under Secretary of Commerce for Industry and Security Jeffrey Kessler told the House Foreign Affairs Committee on July 14 that “very few” Nvidia H200 chips have been shipped to China, CNBC reported. Analysts have interpreted his comment as a signal that limited sales are resuming after years of export restrictions.
If regulatory barriers between Washington and Beijing continue to ease, the Chinese market would add a growth channel that Nvidia has entirely excluded from its revenue forecasts, potentially accelerating the company’s path toward Huang’s broader infrastructure-spending projection.
Even if Nvidia never hits $20 trillion, the spending behind that bet is already rippling out past Wall Street, into utility bills, grocery receipts, and job postings across the economy.
Related: Nvidia CEO Jensen Huang delivers sharp message to major customer
