BlackRock's Asia-Pacific Chief Investment Strategist Ben Powell stated that the capital surge into AI infrastructure is far from reaching its peak. He believes that as hyperscale tech giants race to outspend competitors, the industry's "shovel sellers"—ranging from chipmakers to energy producers and copper wire manufacturers—remain the clearest winners.
Powell noted on Monday that with tech giants aggressively vying for dominance in a "winner-takes-all" competition, the surge in AI-related capital expenditures shows no signs of slowing. "The frenzy in capital spending continues. The flow of funds is very, very clear," he said, adding that BlackRock is focusing on what he calls the "traditional 'shovel-selling' capital expenditure supercycle," which still has room to grow.
AI infrastructure has been one of the biggest drivers of global investment this year, fueling a broader market rally, though some investors question how long this boom can last. Nvidia's GPU chips, a cornerstone of the AI revolution, briefly propelled the company to a $5 trillion market capitalization amid dizzying AI market gains, sparking debates about an AI bubble.
In October, Microsoft and OpenAI also restructured an agreement to support the ChatGPT developer's funding efforts. Reports suggest OpenAI has been preparing for an initial public offering (IPO) with a potential valuation of $1 trillion.
This construction boom has triggered long-term procurement efforts across the tech industry, from chip supply agreements to power commitments. Grid operators from the U.S. to the Middle East are racing to meet soaring electricity demands from new data centers. Companies like Amazon and Meta are allocating annual budgets of tens of billions for AI-related investments.
S&P Global estimates that data center power demand could double by 2030, driven mainly by hyperscale, enterprise, and leased facilities, as well as cryptocurrency mining sites.
Powell also pointed out that leading tech companies are just beginning to tap capital markets to fund the next phase of AI expansion, suggesting more capital is on the way. "Big companies are just starting to dip into the credit markets... It feels like they could do much more there," he said.
Powell noted that hyperscale tech giants are behaving as though coming in second would mean being completely pushed out of the market. This mindset, he added, is driving companies to accelerate spending, even at the risk of overinvestment.
He emphasized that most capital will likely flow to companies supporting AI infrastructure rather than model developers, reinforcing a growing view among global investors that the most enduring gains from the AI boom may lie in the hardware, energy, and infrastructure ecosystem behind the technology.
"I think it's a pretty good position to be in, whether you're making chips, producing energy, or even manufacturing copper wire," Powell said, predicting "positive surprises in the coming year that will drive these sectors' stocks higher."
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