AI’s boom goes beyond chatbots, with data centres, chips and power demand creating opportunities, but debt and lofty valuations raise the stakes.
In partnership with Schroders:
When you ask AI to polish up an email, make an image or explain quantum physics like you’re five, there’s a lot more going on behind the scenes than you might realise…
Most people are familiar with companies like OpenAI, Anthropic, and Google (the businesses building the latest AI models) so it’s usually these guys that get the spotlight when we talk about the AI boom.
But behind all that software is a surprisingly large amount of physical infrastructure being built.
So today, let's go beyond the software and unpack the less obvious opportunities in AI.
The AI boom is a bit like a modern-day gold rush.
While everyone is chasing the next big AI breakthrough, there’s a whole industry building the picks and shovels needed to make it happen.
AI’s appetite for computing power is driving a massive build-out of chips, data centres and the infrastructure that supports them.
In fact, for every data centre being built in 2026, nearly five more are being announced.
So where’s all that money coming from? Increasingly, it's being borrowed.
Big tech is leaning more on debt than its own cash and is on track to borrow about US$250 billion this year. If we count leased data centres too, the total debt is almost double what’s reported.
Not to mention, powering all of this requires a loooot of electricity.
The International Energy Agency expects data centre electricity consumption to more than double by 2030, reaching around 945 terawatt-hours globally.
The point is, the AI boom isn’t just about who builds the models, it’s also about who builds the infrastructure needed to run those models.
Okay, so now you’re tapped into the AI infrastructure boom - how do you work out which companies are worth a closer look?
Because riding the AI wave doesn’t automatically make a company a good investment.
The big question is whether all that spending can turn into even bigger earnings. Google’s cloud revenue grew 81% in a year and Anthropic’s jumped from under US$10 billion to around US$65 billion. But that’s still well short of what’s being spent.
Company valuation matters too.
If investor expectations are sky-high, its share price might already reflect years of anticipated growth.
Since the pay-off from AI isn’t guaranteed, it's important to be selective, watch how it’s funded and stay flexible.
This is where active management can come in.
Instead of just following the biggest AI names, an active manager can look across the wider ecosystem and shift where the portfolio is exposed as opportunities and risks change.
That’s the approach behind the Schroder Real Return Active ETF (ASX: GROW), which invests across growth, defensive and alternative assets, giving the team more flexibility to adapt when market conditions change.
For investors, the AI infrastructure boom means the opportunity is bigger too - but so is the homework. As billions pour into AI infrastructure, the bigger question is which companies can turn that spending into growth.
This article was produced in partnership with Schroders. Before making any investment decision, you should consider seeking independent professional advice and read the relevant Product Disclosure Statement at schroders.com.au.
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