3 ETFs on AI Infrastructure
Capital that last year flowed almost exclusively into chipmakers is moving one level down. Into converters, transformers, substations and buildings without which no computing power will exist. Exchange-traded funds on AI infrastructure have thus become one of the most crowded entry points into the artificial intelligence sector, without most of them ever being designed as AI products. The gap between what an investor thinks they are buying and what they actually hold in their portfolio is unusually wide in this segment. How is it really?
Key points
The AI boom is shifting from chips to infrastructure. Hundreds of billions of dollars are now flowing into electricity, cooling, networks and data centers.
Three ETFs, one AI theme, but completely different portfolios. Each fund actually bets on a different part of the infrastructure chain.
The fund's name can be surprisingly misleading. Under the AI infrastructure label may hide utilities, railways, industrials or telecom towers.
One of the funds saw inflows of over 60% of its current assets in a single year. Most of today's investors thus bought only after a large part of the previous growth.
AI infrastructure is growing, but that does not automatically mean ETF growth. The key is how much of the future boom is already embedded in current prices.
The investment theme of the second AI wave rests on a simple consideration. Spending by the largest cloud operators on data centers is expected to reach roughly $725 billion in 2026, according to available estimates and company guidance, a year-over-year increase of about 77% against $410 billion in 2025. Microsoft is working with an outlook of around $175 billion, Alphabet is in a similar range as Amazon, which is heading above $200 billion, and Meta is exceeding $145 billion. This money will end up in land, concrete, cooling systems, substations, cables and turbines.
This is where the attention of the three funds we analyzed is directed. Each covers a different layer of the same chain, each was created for a different reason, and each carries a different risk. What they have in common is that none of them was originally built as a bet on artificial intelligence.