LinkedIn co-founder Reid Hoffman said the massive capital flowing into AI infrastructure and data center construction is helping sustain the U.S. economy, arguing that the spending is "the only reason we’re not in a recession.
Hoffman Defends AI Data Center Boom
On Friday, Hoffman made the remarks during an appearance on the ‘Newcomer’ podcast released Friday, saying the huge amount of capital behind the AI infrastructure buildout was "the only reason we’re not in a recession."
He said "most of that capital" does not go directly to areas where data centers are being built but is "more distributed across the country."
"That’s great," Hoffman said.
He also highlighted the broader economic impact of data center construction, saying it provides work for construction workers, carpenters, real estate agents, electricians and lawyers.
"All of this capital infusion, people think, ‘Oh, that’s just going to the tech companies,’" LinkedIn cofounder said, adding that a "massive percentage of it is going towards data center construction."
Hoffman also said data center developers should work fairly with local communities to ensure both sides benefit.
AI Infrastructure Expansion
Earlier this month, Meta Platforms Inc. (NASDAQ:META) reportedly classified some AI data centers as "pilot models" to claim federal research tax credits, reducing its tax bill by $3.9 billion in 2025.
However, its accountants reportedly warned that the IRS could challenge the classification.
Broadcom Inc. (NASDAQ:AVGO) was reportedly assembling a $60 billion financing package to help Anthropic and other companies fund AI chip and infrastructure needs.
The financing could have expanded AI capacity and boosted demand for Broadcom’s data-center products.
AI Risks and Financing
Last month, AI skeptic Ed Zitron warned that private credit funding the AI data-center boom had become a "brewing crisis" amid rising borrowing costs and construction delays.
Microsoft Corp. (NASDAQ:MSFT) co-founder Bill Gates said the world might need to experience serious AI-related problems before governments and the public fully addressed the technology’s risks, pointing to a major cyberattack or catastrophe as a potential trigger for stronger action.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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