Middle-class Americans are bearing the brunt of the data center and AI boom through higher electric bills and even food costs, Goldman Sachs warns

Data center agreements peaked as hyperscalers hurried to boost their computational capacity amid the AI competition. But middle-class Americans aren’t the sole ones covering a large portion of the cost to power these facilities. The trickle-down inflation from increased business production expenses is likely to drive up prices for food, transportation, and even clothing, per Goldman Sachs analysts—exacerbating the financial strain on already cash-strapped Americans.

In a Wednesday client note, Goldman Sachs analysts Manuel Abecasis and Hongcen Wei projected that consumer electricity inflation would surge 6% from 2026 to 2027, then slow to 3% the next year due to falling natural gas prices. But higher electric bills for businesses such as hospitals and restaurants mean more costs are passed on to consumers, Goldman Sachs cautioned—that’s inflation. “Higher power prices will also push core inflation upward by increasing business production costs,” Abecasis and Wei stated.

Electricity prices have already risen nearly 7% through December 2025, well above the 2.9% headline inflation rate, the bank pointed out. Additionally, in 2025 rate increases—more than double the 2024 rate—per data from nonprofit PowerLines.

While an aging electrical grid, extreme weather, and higher natural gas prices have fueled over 25 years of soaring electricity costs, data centers are now consuming vast resources. And with , , , and —the four leading hyperscalers—expected to spend a staggering , these prices aren’t likely to drop anytime soon. Furthermore, analysts suggested that small businesses and working- and middle-class Americans are the ones most likely to bear the cost of the massive electricity use powering these centers.

“The drag on income and spending will probably be greater for lower-income households, since electricity makes up a larger portion of their expenses, as well as for households in areas with more data centers—where regional power markets will become tighter,” the note explained.

The bank forecasts that higher electricity prices will push core inflation up by 0.1% in both 2026 and 2027, and 0.05% in 2028—with the biggest portion of that increase coming from medical and food services. New cars and clothing will also get more expensive as an indirect effect of higher utility costs, the note added.

While the impact might seem minor, Goldman Sachs identified a ripple effect on consumer spending and U.S. GDP: higher electricity prices will cut consumer spending growth by 0.2% due to reduced disposable income, and consequently, trim GDP growth by 0.1% from 2026 to 2027. Goldman Sachs would essentially eliminate any GDP growth hit from higher electricity costs.

How the middle class took on the burden of data center expansion 

Customers’ electric bills rise due to capital investments in new grid infrastructure and subsequent rate hikes, along with data centers straining electricity supply.

After these contracts are approved, construction starts quickly, boosting demand not just for electricity, but also for raw materials and labor. When supply is stretched, these resources become scarcer—and more costly—for other businesses near data center construction sites, said Marc Conte, an economics professor at Fordham University.

“The urgency of this massive expansion will also drive inflation,” Conte told , “because they’re willing to pay far above current prices to speed things up, and that can trickle down to consumers.”

Addressing the rising costs tied to data center construction has become . On Wednesday, Sens. Josh Hawley and Richard Blumenthal legislation that would stop data center-related price hikes from hitting consumers’ utility bills and prioritize grid access for non-data-center consumers. Anthropic announced the same day that it plans to from its data centers, but didn’t provide details on its electricity company deals.

Conte compares the fast-paced data center expansion to a city building a new sports stadium. While the potential payoff could be an economic boost, the sacrifices required to fund the project carry risks for the area’s millions of residents.

“We’re placing a lot of trust in these companies,” Conte said. “We’re letting them do things they acknowledge will be extremely disruptive, with uneven burdens falling on [households].”