Macro Drivers
The AI Infrastructure Portfolio is positioned at the heart of one of the most powerful macroeconomic and technological megatrends of the decade, the global acceleration of artificial intelligence investment and the accompanying demand for compute, connectivity, and energy infrastructure. Several macro forces are converging to drive both revenue and valuation expansion across the portfolio’s holdings.
1. Explosive Growth in AI Capital Expenditure
Global AI-related data center spending is forecast to surpass $200 billion annually by 2026, led by hyperscalers like Amazon, Microsoft, Google, and Meta. This multi-year capex cycle is driving sustained demand for GPUs (NVIDIA, Broadcom), advanced semiconductors (TSMC, ASML), and memory (Micron) all core components of the portfolio.
2. Semiconductor Supply Chain Expansion
To meet rising AI chip demand, global foundries are undergoing the largest capacity buildout in history. TSMC, Samsung, and Intel are expanding advanced-node fabs across the U.S., Europe, and Asia, directly benefiting ASML’s lithography tools and TSMC’s production utilization. Governments are reinforcing this trend through industrial policy such as the U.S. CHIPS and Science Act, accelerating regional self-sufficiency in semiconductor manufacturing.
3. Data Center Power & Cooling Constraints
AI compute density is straining global data center power and thermal capacity. Companies like Vertiv (VRT) and Eaton (ETN) are direct beneficiaries as hyperscalers upgrade power distribution, backup systems, and cooling infrastructure. Vertiv’s liquid-cooling solutions and Eaton’s electrical grid modernization projects are critical enablers of continued AI scaling.
4. Network Bottlenecks & High-Speed Connectivity
AI workloads require high-bandwidth, low-latency interconnects across GPU clusters. This is fueling demand for Arista Networks (ANET) and Broadcom’s advanced networking chips. The transition to 800G and 1.6T Ethernet networks is expected to create a multi-year upgrade cycle across data centers globally.
5. Global Policy & Economic Support
Governments worldwide are prioritizing AI competitiveness through direct investment, tax incentives, and public-private partnerships. The U.S., EU, and Japan are all funding domestic semiconductor and compute infrastructure, bolstering companies with global manufacturing footprints like TSMC, ASML, and Micron.
6. Energy Transition Tailwinds
The surge in AI power consumption with projected increases of up to 10× by 2030 dovetails with global efforts to modernize energy infrastructure. This macro shift benefits Eaton and Vertiv, whose technologies bridge traditional industrial engineering and digital power management.
Summary:
Macro conditions are highly favorable for the AI infrastructure ecosystem. From sovereign investment and industrial policy to private-sector hyperscaler capex, every layer of the value chain semiconductors, servers, networking, and energy infrastructure is positioned for sustained multi-year growth. The portfolio directly captures this structural transformation, reflecting the economic foundation of the AI era rather than speculative adoption trends.