X-Plained: What is AI Infrastructure?

By far and away, artificial intelligence (AI) continues to be one of the most influential investment themes globally. But while most of the focus has been on software platforms and semiconductor giants, what often goes overlooked is the physical backbone making it all possible: AI infrastructure. As the AI boom accelerates, so does demand for data centres, power grids, and the raw materials that fuel them. This has created a structural investment opportunity that goes beyond the digital surface to the real-world assets enabling AI’s growth.

Let’s X-Plain:

• What is AI infrastructure?
• Why invest in AI infrastructure?
• Why use an ETF to access AI infrastructure?
• How to incorporate AI infrastructure into a portfolio

What is AI Infrastructure?

AI infrastructure refers to the physical foundation supporting the operation and growth of AI technologies, which includes data centres, energy supply and raw materials. Think about it in three key steps:

• Data centres are needed for AI computing power.
• Modernised energy supply and increasing power grid capacity is needed to power the data centres.
• More raw materials such as copper and uranium are needed to build and run the data centres via the improved energy supply.

Why Invest in AI Infrastructure?

To date, software and chipmakers have garnered a large portion attention in the AI space, leading to significant underinvestment in AI infrastructure. Hence, investing in AI infrastructure is becoming increasingly important due to the rising demand for data centres and the physical systems that support them. As AI technologies require immense computing power, there is a growing need for energy infrastructure and raw materials to keep up with this demand. For instance, global data centre capital expenditure is projected to exceed US$2 trillion over the next five years, highlighting the scale of this investment opportunity. Additionally, an estimated US$50 billion or more will be needed specifically for power infrastructure to support AI growth.

This investment is not limited to tech giants, as it also benefits utilities, grid operators, and energy providers. Essential materials like copper and uranium are crucial in this buildout. Copper, for instance, is widely used in constructing data centres, enhancing power grids, and ensuring efficient energy transmission. Therefore, investing in AI infrastructure offers access to a broad and durable growth trend fuelled by AI’s rapid expansion.

Why use an ETF to access AI Infrastructure?

ETFs offer an accessible, convenient way to invest in the AI infrastructure theme because they are able to provide investors access to the different areas of AI infrastructure in one trade rather than having to select individual companies.

The Global X Artificial Intelligence Infrastructure ETF (AINF) for instance is specifically designed to capture the real economy beneficiaries of AI growth by focusing on three critical sub-themes: power and energy infrastructure, data centre infrastructure, and raw materials like copper and uranium. By investing in pure-play companies that generate the majority of their revenue from these sectors, the ETF ensures that investors are directly exposed to the core drivers of AI infrastructure. Additionally, its diversified approach across sectors and global regions, along with equal weighting and regular rebalancing, helps reduce risk and keep the portfolio aligned with market developments.

How to Incorporate AI Infrastructure into a Portfolio

Thematic ETFs such as AINF are generally designed to be incorporated in the satellite portion of a core and satellite portfolio model. Here are three possible ways to incorporate AI infrastructure into a well-diversified portfolio:

• A tactical allocation to capture the long-term investment cycle in AI infrastructure, including energy systems, data centres, and essential raw materials.
• A complementary position alongside semiconductor or software-focused AI exposures to broaden thematic coverage and reduce concentration in tech platforms.
• A differentiated exposure to companies building the physical infrastructure behind AI, giving investors access to capital-intensive enablers often overlooked in traditional AI strategies.

Related Fund AINF: The Global X Artificial Intelligence Infrastructure ETF (AINF) invests in leading data centre, energy, and materials companies which form the backbone of global artificial intelligence adoption and development.

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