Investment Themes 2025: Smart Infrastructure

Generative AI adoption continues to flow through industries and remains one of our central focuses. Having previously spoken of Semiconductors and Equipment, we now shift further along the value chain to arrive at Smart Infrastructure, one of the most exciting areas of the AI revolution.

Data Centres

Explosive demand for generative AI is expected to fuel significant growth in the market for Data Centres – huge plants which provide the necessary computing power for AI training and applications, as well as data storage for enterprises.

The global market for AI servers (which are run by Data Centres), is estimated to have more than doubled in 2024 to $39.4bn USD from the 2022 figure. AI is expected to contribute more than 20% of global server revenue in 2025 – significant growth from 15% in 2021.

Cloud Computing Infrastructure

Although Data Centres are poised to be the most prominent segment to benefit from the growth of generative AI in the near future, we also favour cloud computing infrastructure within the wider Smart Infrastructure theme.

Cloud computing is used to provide various services such as virtual servers to run applications (including generative AI as a service), data storage, business development tools such as Customer Relationship Management or Enterprise Resource Planning and communications to name a few.

Eventually, generative AI as a service is expected to be a much larger market than servers and data storage with an estimated compound annual growth rate (CAGR) of 54% through to 2032.

While some uncertainty has arisen recently in the broader buildout of AI infrastructure, what these charts show is that, regardless of exactness there is huge potential for growth in these themes over the long term.

We remain diversified globally and across industries to ensure the portfolios are risk efficient, while focusing on long-term structural investment themes to capitalise on future growth.

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