Trump's Rust Belt AI Gamble: From Chevy Impalas to ChatGPT Servers

The revival of America's Rust Belt has taken a futuristic twist. In Lordstown, Ohio, the same General Motors GM plant that once built Chevy Impalasand stood as a monument to American manufacturingwill soon power a new industrial age. Foxconn, OpenAI, and SoftBank (SOBKY) are teaming up to turn the 6.2 million-square-foot site into a hub for AI hardware production, complete with a demonstration data center. President Donald Trump, who once told workers in nearby Youngstown not to sell their houses because the jobs would return, now sees AI as the path to economic renewal. The transformation of Lordstown could be the clearest signal yet that America's growth story is shifting from steel and engines to chips and data.

AI infrastructure spending is now doing the heavy lifting for the US economy. Bloomberg Economics estimates that hyperscalers like Alphabet GOOG, Amazon AMZN, Meta META, and Microsoft MSFT could raise their combined AI investments from roughly $400 billion this year to as much as $600 billion next year. Without this wave, GDP growth in the first half of 2025 might have been closer to 1% instead of 1.6%. But the same capital inflow that's energizing data centers is draining the oxygen from traditional manufacturing. Construction of new factories is down 2.5% this year, while spending on data centers has surged nearly 18%. AI is consuming a lot of the oxygen in the room, said Wesco International CEO John Engel, whose company now gets a rising share of its revenue from data center projects.

Trump has leaned hard into AI, touting its potential to boost US competitiveness and national security. His White House has hosted tech leaders including Sam Altman, Masayoshi Son, and Larry Ellison to advance the $500 billion Stargate Projecta sweeping plan to expand AI infrastructure across the country. Yet his tariff-heavy approach could be weighing on the very manufacturing revival he once promised. Tariffs on imported machinery are raising costs for industrial firms already struggling with worker shortages and power constraints. In regions packed with new data centers, wholesale electricity prices have jumped as much as 267% in five years. The Lordstown project could create around 1,600 jobs when operational, a fraction of the 12,000 once employed there. For America's heartland, the next factory boom may no longer run on gasoline or gritit could run on algorithms.