The Opportunity

Artificial Intelligence (AI) is primed to be one of the most impactful technological revolutions in modern history, with the potential to transform significant parts of the global economy. As the use of AI and related technologies increases across different industries, the build-out of digital infrastructure such as fiber networks, wireless infrastructure and data centers to process, transmit and store data is becoming increasingly important. 

While the demand for digital infrastructure may be fairly obvious, the bottleneck for AI adoption is going to be the access to power. An internet search query using an AI service requires substantially more power than a typical Google search. With 5.3 billion global internet users and the expected widespread adoption of AI, there is going to be a significant increase in power demand. This is in addition to electricity needed for industries, heating for houses, and other uses. Combining all these requirements together, the total global installed capacity for electricity is expected to more than double over the next 20 years, while some of the existing power generation facilities are expected to be retired due to their carbon-intensive nature.⁷ 

Once power is generated, data centers also need to be connected to the grid to deliver the power through transmission assets. Utilities and owners of power generation assets are positioned to benefit from the increase in electricity demands. We also believe midstream infrastructure will be a prime beneficiary, helping provide data centers with cost-efficient, consistent and reliable natural gas as a power source. 

In summary, artificial intelligence has initiated a domino effect on several of the sectors in infrastructure, broadening the opportunity set for the asset class and while helping to create opportunities for investors.

Sticking to the Ground Rules 

It is important to place the AI infrastructure boom in a historical context. Other technologies that are now well-established required additional infrastructure resources when launched, such as mobile phones, fiber optics, and cloud technology. For the most part, AI is and will be no different. 

Continuous improvements in technology behind AI servers and software is positive, as they lead to new and more complex AI use cases, such as robotics. Moreover, the prospect of more cost-effective AI applications is likely to increase adoption rates for AI, making the technology more widely accessible. Overall, technological disruption naturally bodes well in the long term for digital infrastructure demand, consequently creating significant growth opportunities to power this demand across sectors, such as renewable power, energy transition, utilities and midstream. 

Certainly, investors should be excited about what’s ahead. However, it is equally important to note that the traditional ground rules around investing in infrastructure still apply. While AI is still new, it is important to revisit the essential principles when it comes to investing in infrastructure and target investments that: 

• Constitute “the backbone of the economy,” including the digital backbone—in other words, assets that are essential to society and economic activity;
• Have predictable cash flows with creditworthy counterparties; and
• Have limited to no technological risk. 

Particularly, technological risk is a key risk to avoid for infrastructure investors, as technological advancements are not often linear and technology can become obsolete quickly. In contrast, infrastructure assets are long-life assets.

Bottom Line

Infrastructure presents a way to invest in the AI tailwind with less volatility than investors may be subjected to when investing in technology companies. Still, when investing in AI infrastructure, consider looking for well-established investment managers who are benefitting from the AI tailwind as a natural extension of their existing business, and who have the scale and depth in each of the sub-sectors that is relevant for digitalization.

A WORD ABOUT RISK 

As an asset class, private credit is comprised of a large variety of different debt instruments. While each has its own risk and return profile, private credit assets generally have increased risk of default, due to their typical opportunistic focus on companies with limited funding options, in comparison to their public equivalents. Because private credit usually involves lending to below investment grade or non-rated issuers, yield on private credit assets is increased in return for taking on increased risk. Investments in real estate-related instruments may be affected by economic, legal or environmental factors that affect property values, rents or occupancies of real estate. Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability and energy conservation policies. Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. High-yield bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally, the longer a bond’s maturity, the more sensitive it is to this risk. Yields are subject to change with economic conditions. Yield is only one factor that should be considered when making an investment decision. The information in this publication is not and is not intended as investment advice, an indication of trading intent or holdings, or prediction of investment performance. Diversification does not guarantee a profit or protect against loss. Views and information expressed herein are subject to change at any time. Brookfield disclaims any responsibility to update such views and/or information. This information is deemed to be from reliable sources; however, Brookfield does not warrant its completeness or accuracy. Opinions expressed herein are current opinions of Brookfield, including its subsidiaries and affiliates, and are subject to change without notice. Brookfield, including its subsidiaries and affiliates, assumes no responsibility to update such information or to notify clients of any changes. Any outlooks, forecasts or portfolio weightings presented herein are as of the date appearing on this material only and are also subject to change without notice. Past performance is not indicative of future performance, and the value of investments and the income derived from those investments can fluctuate. 

FORWARD-LOOKING STATEMENTS 

Information herein contains, includes or is based on forward-looking statements within the meaning of the federal securities laws, specifically Section 21E of the Securities Exchange Act of 1934, as amended, and Canadian securities laws. Forward-looking statements include all statements, other than statements of historical fact, that address future activities, events or developments, including, without limitation, business or investment strategy or measures to implement strategy, competitive strengths, goals, expansion and growth of our business, plans, prospects and references to our future success. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other similar words are intended to identify these forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results or outcomes. Consequently, no forward-looking statement can be guaranteed. Our actual results or outcomes may vary materially. Given these uncertainties, you should not place undue reliance on these forward-looking statements. It is not intended to provide an overview of the terms applicable to any products sponsored by Brookfield Corporation and its affiliates (together, “Brookfield”). Information and views are subject to change without notice. Some of the information provided herein has been prepared based on Brookfield’s internal research, and certain information is based on various assumptions made by Brookfield, any of which may prove to be incorrect. Brookfield may not have verified (and disclaims any obligation to verify) the accuracy or completeness of any information included herein, including information that has been provided by third parties, and you cannot rely on Brookfield as having verified any of the information. The information provided herein reflects Brookfield’s perspectives and beliefs as of the date of this commentary.

INDEX PROVIDER DISCLAIMER 

The quoted indexes within this publication are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison, such as differences in volatility and also regulatory and legal restrictions between the indexes shown and any investment in a Brookfield strategy, composite or fund. Brookfield obtained all index data from third-party index sponsors and believes the data to be accurate; however, Brookfield makes no representation regarding its accuracy. Indexes are unmanaged and cannot be purchased directly by investors. 

Brookfield does not own or participate in the construction or day-to-day management of the indexes referenced in this document. The index information provided is for your information only and does not imply or predict that a Brookfield product will achieve similar results. This information is subject to change without notice. The indexes referenced in this document do not reflect any fees, expenses, sales charges or taxes. It is not possible to invest directly in an index. The index sponsors permit use of their indexes and related data on an “as is” basis, make no warranties regarding the same, do not guarantee the suitability, quality, accuracy, timeliness and/or completeness of their index or any data included in, related to or derived therefrom, and assume no liability in connection with the use of the foregoing. The index sponsors have no liability for any direct, indirect, special, incidental, punitive, consequential or other damages (including loss of profits). The index sponsors do not sponsor, endorse or recommend Brookfield or any of its products or services. Unless otherwise noted, all indexes are total-return indexes.

INDEX DEFINITIONS 

The Preqin Infrastructure Index captures in an index the return earned by investors on average in their private infrastructure portfolios, based on the actual amount of money invested in private capital partnerships. Each data point is individually calculated from the pool of closed-end funds for which comprehensive performance data is held, as of both the start and end of the quarter. 

The FTSE Global Core Infrastructure 50/50 Index gives participants an industry-defined interpretation of infrastructure and adjusts the exposure to certain infrastructure subsectors. The constituent weights are adjusted as part of the semi-annual review according to three broad industry sectors: 50% Utilities; 30% Transportation, including capping of 7.5% for railroads/railways; and a 20% mix of other sectors including pipelines, satellites and telecommunication towers. Company weights within each group are adjusted in proportion to their investable market capitalization. 

The MSCI World Index is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets. 

© 2025 Brookfield Corporation 

ID B691727