For the first time, U.S. spending on information processing equipment has surpassed spending on private residential investment, a shift that investor Daniel Kaufman says should fundamentally change how AI data center campuses are planned and built. According to federal data reported by Fortune on Sept. 20, spending on information processing equipment reached $752 billion in the second quarter, edging past real private residential fixed investment of $748 billion. Residential investment is down 18% from its early 2021 peak, while computing spending is up 51%.
Kaufman, founder of the permanent capital holding company Kaufman & Company, said Wednesday that the milestone should prompt developers to include housing for the workers who operate AI campuses from the outset rather than leaving it to chance or treating it as someone else's problem.
"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 announcement comes as public pushback against data centers intensifies. In Utah, residents are challenging a county's approval of a $10 billion data center campus. In El Paso, Texas, officials adopted new rules for data centers this summer. Those local disputes reflect growing concern about the strain large computing facilities place on infrastructure, water and housing, and about what communities receive in return for hosting them.
Kaufman & Company has a stake on both sides of the issue. ServerDomes Global, a Kaufman Ventures portfolio company, announced plans in July for geodesic dome data centers in Utah and El Paso, including an El Paso site spanning 24,000 acres. The company has said the domes are designed to use about 90% less water than conventional facilities.
On the housing side, Kaufman's platform includes DK Homes, Design Build Affordable and the factory-built Mr Good Container Homes, and works with Oldivai, an aligned, independently led workforce housing partner. The combination positions the company to address both the computing infrastructure and the residential needs that typically accompany large-scale development.
"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."
Kaufman & Company is a permanent capital holding company founded and led by Daniel Kaufman, spanning residential development, workforce housing, AI infrastructure and venture capital across 10 operating companies. Backed by more than 25 years of real estate experience, the platform has delivered more than $2 billion in project value and financed or developed more than 10,000 housing units.
The broader implication is that as AI infrastructure spending continues to outpace residential investment, data center developers may face growing pressure to embed housing and community benefits into their projects. Kaufman's argument suggests that integrating workforce housing into AI campus site plans could become a competitive necessity, not just a social good, as communities demand more from the companies seeking permits and power.
