The AI infrastructure gold rush is nowhere near over, according to BlackRock, with the world's largest asset manager doubling down on the 'picks and shovels' suppliers powering the tech industry's unprecedented spending spree. Chief investment strategist Ben Powell told CNBC that hyperscalers have barely started tapping debt markets, signaling much more capital is coming.
The artificial intelligence arms race isn't slowing down - it's accelerating into what BlackRock calls a 'traditional picks and shovels capex super boom.' Speaking at Abu Dhabi Finance Week, Ben Powell, the asset manager's chief investment strategist for Asia-Pacific, delivered a clear message to investors: the infrastructure suppliers powering AI's expansion remain the clearest winners as tech giants burn through unprecedented amounts of capital.
'The capex deluge continues. The money is very, very clear,' Powell told CNBC on Monday, describing how hyperscalers are behaving as if coming second means being completely shut out of the market. That winner-takes-all mentality is pushing companies to accelerate spending even at the risk of overshooting demand.
The numbers back up Powell's optimism. Nvidia became the first company to briefly surpass $5 trillion in market capitalization this year, while Microsoft and OpenAI restructured their partnership in October to support the ChatGPT maker's fundraising efforts ahead of a potential $1 trillion IPO.
But here's what caught Powell's attention: the debt markets. 'The big companies have only just started dipping their toes into the credit markets... feels like there's a lot more they can do there,' he said. Translation? The current spending spree is just the warm-up act.
Amazon and Meta have already budgeted tens of billions annually for AI investments, but Powell sees room for much more leveraging. The infrastructure build-out has triggered long-term procurement agreements spanning everything from chip supply deals to multi-year power commitments, creating a pipeline of guaranteed revenue for suppliers.
Grid operators from Texas to the Middle East are scrambling to meet soaring electricity demand from new data centers. S&P Global estimates data center power consumption could nearly double by 2030, driven primarily by hyperscale facilities, enterprise deployments, and crypto mining operations.
