Reflecting back on 2025, a day has not gone by without investors debating AI’s impact, promise, or peril. Headlines were dominated by AI-related stock news, yet the most enduring growth story was found beneath the surface — the steady and compounding build out of the physical infrastructure needed for AI to flourish. From power grids, high-performance networks, and data centers, the massive demand spike for infrastructure is turning what was once known as an income-focused utility model into a high-demand growth engine. According to McKinsey & Company, data centers globally are projected to need $6.7 trillion in cumulative capital investment by 2030 to keep pace with computing demand, with $1.3 trillion of that allocated to power generation and transmission alone.
The Projected Doubling of Data Center Power Demand Is a Major Driver for Comprehensive Infrastructure Upgrades
Source: LPL Research, Gartner 11/17/2025
This rush to build and energize has naturally led to valuation appreciation on involved infrastructure, with the stability of contracted revenue from hyperscalers adding premium. Yet, we believe we are only in the early innings of the secular trend and there is ample room for further appreciation and performance. Simply put, the demand curve for power and data center capacity is rising faster than the ability to supply them. Assets with secured power and land rights are becoming irreplaceable commodities, allowing them to carry valuation premiums and higher rental rates for the foreseeable future. And even with massive public and private investment, the slow-to-build supply of physical infrastructure, especially the power grid, is fundamentally constrained by long regulatory and construction cycles, leaving risk of oversupply and saturation almost irrelevant for the next decade.
In conclusion, the AI revolution is not just a simple semiconductor and software story, but also one of fundamental physical infrastructure scarcity. While we note the recent valuation appreciation, we see this as the price of entry into a market defined by structurally insatiable demand and compounding cash flow.