AI, data centres and energy: why is infrastructure having a moment?

Google has just announced its largest single investment in Europe to date. It is preparing to spend at least €13 billion on data centres and supporting infrastructure in Finland over the next two years.

It is a glimpse of the scale of investment AI could unlock. McKinsey estimates $5.2 trillion may need to be spent by 2030 just on data centres capable of handling AI workloads. And that might only be the beginning. Those data centres must also be built, powered, cooled and connected, creating vast demand for energy infrastructure, grid capacity and digital networks.

AI is driving the latest surge in demand, but it is part of a much broader story on how the world’s essential systems are built and financed. What is driving demand? What could it mean for investors? And how might eligible private investors gain exposure?

In this article, we consider the main points for investors, including the potential appeal and risks, so you can form your own view.

Besides the enormous infrastructure requirements of the AI boom, to function, the world also needs substantial investment in energy and power, transport and logistics, digital networks, water and waste systems, and other essential assets.

McKinsey estimates that $106 trillion of infrastructure investment will be required globally by 2040. It is a gargantuan sum, far beyond the capacity of any government or company to finance alone.

Enter private capital.

Specialist asset managers raise money from institutional investors such as pension funds, insurers and sovereign wealth funds, as well as private investors, then deploy it into projects and businesses: they help build, operate and maintain these essential assets.

Major investment firms – the likes of Brookfield, Apollo, Macquarie, EQT, Hamilton Lane, Pantheon, Stonepeak and StepStone – now operate substantial dedicated infrastructure platforms.

Institutional investors and family offices were quick off the mark. In 2025, global infrastructure fundraising reached a record of nearly $200 billion, surpassing the previous high of $180 billion in 2022. In McKinsey’s survey of around 300 large investors worldwide, 51% planned to increase their infrastructure allocations over the next three years.

In simple terms, infrastructure funds acquire, build or finance assets and businesses that provide essential services.

Traditionally, this meant roads, railways, airports, ports, power networks and water systems. Today, infrastructure includes much more: data centres, fibre networks, telecom towers, battery storage and electric-vehicle charging networks.

Funds may invest directly in physical assets, such as wind farms or data centres, or in the businesses that own, operate and maintain them.

Returns can come from income generated while the asset is operating – for instance, the fees technology companies pay to lease space and computing capacity in a data centre – and/or from capital growth as it is developed, expanded or sold – perhaps after adding capacity and securing new customers, in the data centre example.

Each infrastructure fund will have its own focus and strategy. Some may target mature assets aiming to generate relatively steady income. Others will focus on building new assets or making significant operational changes, in pursuit of capital growth and accepting more risk in the process. Many combine the two, balancing the potential for income from mature assets with capital growth from development and operational improvement.

The main potential appeal of infrastructure lies in both the nature of the assets and the scale of the opportunity. Essential demand and long-term contracts can support recurring revenues, while inflation-linked pricing and return drivers distinct from traditional markets may add ballast to a portfolio. Meanwhile, sustained investment in digital infrastructure, energy systems and the replacement of ageing essential assets could create opportunities for infrastructure investors for decades to come.

• Essential demand that may withstand economic pressure

  Whatever happens in the global economy, homes will still need electricity and water, businesses still need data and connectivity, and goods still need to move. This essential, recurring demand can make some infrastructure assets more resilient than businesses reliant on discretionary spending. That said, the degree of resilience depends on the asset. Transport infrastructure, for instance, may remain exposed to falling passenger or traffic volumes, while data centres are exposed to risks such as electricity grid disruptions, water supply shortages, and planning consent delays.

• Potential for recurring and predictable revenues

  Once operational, infrastructure assets have the potential to generate recurring and relatively predictable revenues, often driven by long-term contracts. However, this is not guaranteed.

• Possible protection against inflation

  Infrastructure revenues can be linked to inflation through contracts or regulation. This may allow an operator to raise prices as costs increase. That said, inflation cuts both ways. It may also increase construction, maintenance, staffing and borrowing costs.

• A different source of returns

  Infrastructure returns are often driven by demand for essential services, long-term contracts and regulation, rather than the factors affecting shares and bonds. This can help diversify a portfolio.

• Opportunities beyond a single market cycle

  AI needs data centres and power. Electrification requires stronger grids. Ageing transport networks, water systems and other essential assets must be upgraded or replaced. For investors, this could create opportunities across sectors and market cycles, with potential returns supported by decades of spending on infrastructure the modern economy cannot function without. However, returns will still depend on the price paid, the risks taken and the manager’s ability to deliver each project successfully.

There are two main ways for UK private investors to access infrastructure investments: listed investment trusts and private funds.

Infrastructure investment trusts

Infrastructure investment trusts are closed-ended investment companies listed on the London Stock Exchange that specifically focus on infrastructure. They are generally easy to trade, accessible, and have no set minimum investment.

On the flip side, choice can be relatively limited, as only a handful of specialist private infrastructure managers offer listed funds. Moreover, when you invest in an investment trust, you remain exposed to stock-market sentiment: shares can be volatile, trade at substantial discounts to their underlying value and remain discounted for long periods. Some trusts also use borrowing, which can magnify losses as well as gains.

Private infrastructure funds

Private funds invest directly in infrastructure assets and businesses outside public markets. This can provide access to a broader range of opportunities and allow managers to take an active role in developing, expanding and operating assets. There are several highly rated managers, which specialise in infrastructure investments or have a dedicated specialist team and offer infrastructure funds for eligible investors.

The main trade-off compared to investment trusts is significantly reduced liquidity. Even evergreen funds – a relatively new and more investor-friendly structure – cannot be easily or quickly traded. If you want to invest, there are set subscription windows, usually once a month. To sell, there are set redemption windows, usually once per month or quarter, depending on the fund. There may be early redemption penalties and many funds cap total redemptions, e.g. at 5% of Net Asset Value or NAV per quarter.

Also, whilst investment trusts can usually be bought by anyone, regulatory constraints restrict access to evergreen Private Markets funds, including infrastructure funds, to more experienced or professional investors. For instance, to see all the fund details, you must qualify as a high-net-worth or sophisticated investor and, before you apply, we ask you to complete a questionnaire to document your investment knowledge and experience: you will need to become an Elective Professional Client to invest.

Infrastructure is often described as defensive because the underlying investments often provide essential services and can benefit from long-term contracts or regulated revenues. However, there are significant risks. Outcomes can vary significantly between funds and individual assets.

Key risks include:

• Illiquidity – Private infrastructure investments are designed for the long term. Even when investing through an evergreen fund, redemption requests are typically restricted to specific dealing windows and may be delayed or capped during periods of high demand. Early redemption penalties or restrictions may also apply.
• Project and operating risk – Infrastructure projects can run over budget, face delays, be poorly managed, encounter technical problems or fail to attract the level of demand originally expected. Returns ultimately depend on the cash flows generated by the underlying assets.
• Regulatory and political risk – Many infrastructure assets operate in heavily regulated sectors such as energy, utilities and transport. Changes to regulation, subsidies, planning rules, taxation or price controls can affect profitability and valuations. Private infrastructure assets may become subject to nationalisation.
• Leverage risk – Infrastructure investments often use borrowing to enhance returns. While this can boost gains when things go well, it can also magnify losses and increase pressure on investments during periods of higher interest rates or weaker operating performance.
• Manager risk – Infrastructure investing is highly specialist. Returns depend heavily on the manager's ability to source opportunities, assess risks, structure transactions, improve assets and ultimately realise value. A poor acquisition price or weak execution can materially reduce returns.
• Valuation – Private assets are valued periodically using private data, rather than traded continuously using publicly available data. As a result, valuations may not fully reflect changing market conditions and may be more opaque than publicly traded investments.
• Risk to capital – Investors could lose some or all of their capital. Income is variable and not guaranteed. You should not invest money you cannot afford to lose, or may need in the short to medium term.

Google's €13 billion cheque is unlikely to be a one-off. New data centres. Greater electricity generation. Upgraded power grids.

Extended fibre networks. Vast sums will need to be spent building the infrastructure to power the next phase of the digital economy. And much of that spending likely still lies ahead.

For investors, the opportunity may extend beyond the companies grabbing the AI headlines and into the infrastructure making their growth possible.

Infrastructure funds offer eligible investors one route. Depending on the strategy, they can provide access to assets and businesses that are often difficult to reach through public markets, from data centres and telecoms networks to energy infrastructure, battery storage and other essential systems.

The opportunity is not without risk. But if the infrastructure buildout now underway does continue for years, or even decades, it may become an increasingly difficult opportunity for investors to ignore.