The artificial-intelligence boom is no longer just showing up in stock prices, earnings calls, and data-center announcements. It is now visible in the Federal Reserve’s industrial production data.
Output of computer and electronic products rose 1.5 percent in April, one of the strongest gains among major manufacturing categories, the Fed reported Friday. The broader special aggregate covering computers, communications equipment, and semiconductors rose 1.0 percent.
The gains point to a rapid expansion in the physical manufacturing base behind the AI buildout: servers, computers, chips, communications gear, electronic components, and related business equipment.
Production of computer and peripheral equipment rose 1.5 percent in April. Output of semiconductors and other electronic components rose 1.0 percent, while communications equipment increased 0.6 percent.
Business equipment tied to information processing rose even faster. The Fed’s index for information processing and related business equipment climbed 1.7 percent in April, underscoring the extent to which the AI investment boom is feeding into the machinery and equipment side of the economy.
The most striking signal may be capacity. The Fed estimates that capacity in the computers, communications equipment, and semiconductor complex rose 1.0 percent in April alone and has climbed 7.3 percent since October. Capacity in the broader computer and electronic products category has risen 3.4 percent over the same period.
That means the AI boom is not merely pushing existing factories to run harder. It is expanding the productive base of U.S. tech manufacturing.
Capacity utilization tells the same story from another angle. Utilization in computer and peripheral equipment rose to 83.9 percent in April, up from 83.1 percent in March and 79.5 percent in December. Apart from the unusual post-financial-crisis spike in 2010 and 2011, that is the highest reading since March 2000, near the peak of the late-1990s technology boom.
The 2010 episode was very different from the current one. Then, utilization surged because measured capacity collapsed faster than output after the recession. In the current period, output is rising, capacity is rising, and utilization is rising with them.
Since December, output of computer and peripheral equipment has jumped 8.2 percent, while capacity has risen 2.6 percent. Utilization has climbed 4.4 percentage points. That is the signature of a sector expanding rapidly while still facing intense demand for existing factory capacity.
Other tech-related categories are also advancing. Electrical equipment, appliances, and components rose 0.4 percent in April, while machinery output rose 0.6 percent. Fabricated metal products, another category exposed to the data-center and industrial buildout, rose 0.6 percent.
The data suggest that the AI boom is taking a different shape from earlier waves of technology adoption. The smartphone and tablet booms reshaped consumer electronics, but much of the manufacturing expansion took place overseas. The cloud-computing boom drove data-center construction and hyperscaler capital spending, but it did not produce the same broad surge in U.S. manufacturing.
The current cycle is showing up more directly in U.S. industrial production. Computer equipment output is rising sharply. Semiconductor and electronic component production is climbing. Information-processing business equipment is advancing. Capacity is expanding. Utilization in key categories is approaching levels last seen around the late-1990s technology boom.