US businesses continued to invest heavily in equipment in August, with new orders for key capital goods rising much more than economists expected as the country's artificial intelligence infrastructure boom continues to support business spending.

Orders for non-defence capital goods excluding aircraft, a closely watched measure of business investment, rose 1.6% in August after an upwardly revised 0.6% increase in July. Economists surveyed by Reuters had expected a 0.5% increase. The latest figures point to another quarter of strong investment in equipment across the US economy.

Shipments of these capital goods, which feed into the business investment component of US GDP, also increased by 0.6% in August after rising 1.4% in July. Core capital goods orders were 10.6% higher than a year earlier, highlighting the strength of corporate spending on equipment.

Artificial intelligence is playing a major role in that investment. Companies are spending heavily on data centres, computing equipment, electrical systems and other infrastructure needed to support growing AI workloads. The technology boom has therefore become an important source of demand for manufacturers and suppliers beyond the software industry itself.

The latest numbers come despite a more complicated environment for American businesses. Oil prices remain elevated, while higher interest rates and rising long-term Treasury yields are increasing the cost of financing. Economists have warned that these pressures could weigh more heavily on manufacturing businesses whose growth is not directly connected to AI investment.

There are already signs of that uneven performance. Overall durable goods orders were virtually unchanged in August at $338.6 billion, according to the US Census Bureau. Orders excluding transportation increased 0.3%, while transportation equipment fell 0.6%.

That creates an interesting split in the US economy. Businesses connected to AI infrastructure, computing and advanced equipment are seeing strong demand, while companies operating in other parts of manufacturing are dealing with higher costs and more expensive capital.

The strength of business investment could also become important for the wider economy. Equipment spending has recorded two consecutive quarters of double-digit growth, helping support manufacturing and economic activity. However, the sustainability of AI-led investment remains a question as businesses assess how much spending can continue at its current pace.

For founders and investors, the figures highlight how quickly AI is affecting areas of the economy well beyond technology startups. Demand for power, data centres, semiconductors, electrical equipment, construction and specialist infrastructure is creating opportunities across a much wider business ecosystem.

At the same time, higher borrowing and energy costs mean companies outside that investment cycle may face a very different environment.

Is AI investment creating opportunities in your industry, or is the higher cost of doing business becoming the bigger issue?

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