What Foxconn’s Ohio Factory Deal Says About the Increasing Reach of AI

Talk about symbolism. Foxconn chair Young Liu said today that the electronics manufacturer was selling its Lordstown, Ohio, electric vehicle factory to SoftBank, which will use it to make artificial intelligence computer servers. It’s the latest example of how AI is supplanting other newish technologies. (Notably, the Lordstown factory, which Foxconn bought in 2022 from Lordstown Motors, was originally a General Motors plant making Chevys and Pontiacs, as columnist Steve LeVine wrote about.) Also today, TeraWulf, which operates a data center in New York state originally dedicated to bitcoin mining, did its second deal in a week to expand the data center by adding AI-related computing capacity—with Google's backing.

AI dominates everything nowadays. The daily newsletter from Apollo chief economist Torsten Slok today reported that in the first half of this year, “the contribution to GDP growth from data center investments has been the same as the contribution from consumer spending.” Typically, consumer spending is the engine for the U.S. economy, so the fact that data center construction is contributing as much is a huge deal. It’s also, for anyone prone to envisioning bad things around the corner, a bit of a worry. What happens if (or when) something happens that sparks a reversal of this massive investment in AI capacity?