The Hidden Net Cost of Data Center Construction and Operation for Household Service Pricing

The rapid expansion of artificial intelligence (AI) is accelerating data center construction and creating downstream implications for households. This study examines how AI-era data center costs (comprising construction, energy, water, grid upgrades, cooling, and lifecycle management) move through service supply chains and affect household prices in healthcare, transportation, education, banking, and commerce. It also considers the productivity and welfare benefits that AI may transmit. This study identifies four pass-through channels: utility-rate socialization of energy costs, cloud-platform pricing, sectoral pass-through from AI-adopting industries, and indirect effects through supply chains and labor markets. It introduces the AI-inflated net good basket, defined as transmitted cost minus transmitted benefit, to show how AI reshapes the overall net cost of household consumption rather than simply inflating individual prices. The study develops the AI Infrastructure Net Cost Pass-Through Model (AI-NCPM), a four-layer conceptual framework tracing net cost flows from data center investment to sectoral allocation and household outcomes. The model’s parameters are analytically specified but not empirically calibrated; numerical examples are illustrative rather than representing estimated effects. Its main contribution is an integrative framework linking cost pass-through, infrastructure cost socialization, two-sided platform allocation, environmental externalities, and household expenditure incidence within a single net-cost account. Because these effects originate in the design, construction, energy and cooling systems, and lifecycle operation of data centers, the analysis connects AI infrastructure economics to the built environment. The framework suggests that low-income, minority, rural, older adult, and disability-affected households may face disproportionate net burdens, as costs fall heavily on essential services while benefits accrue more readily to affluent and digitally connected households.