BlackRock is sharpening its focus on the companies powering the backbone of artificial intelligence infrastructure, arguing that the wave of capital pouring into the sector is unlikely to slow anytime soon.
In a new assessment of global markets, the firm said rapid spending by tech giants is driving what it views as one of the most durable investment cycles in years. The comments add weight to a growing debate about where the most reliable returns lie within the broader AI boom.
The latest outlook comes as AI investment reaches historic levels, fueling sharp gains across equity markets and reshaping corporate capital spending priorities.
Nvidia briefly crossed the $5 trillion valuation mark earlier this year, Microsoft deepened its financial ties with OpenAI, and cloud providers are racing to secure long-term access to power, chips and data-center capacity.
Ben Powell, chief investment strategist for Asia Pacific at BlackRock, told CNBC during Abu Dhabi Finance Week that the firm sees a “traditional picks and shovels capex super boom” that still has significant room to grow.
His comments reflect BlackRock’s broader AI strategy, which centers on identifying companies linked to hardware, energy and industrial supply chains.
The core of the BlackRock AI investment thesis is that suppliers stand to benefit more consistently than model developers, who face rapidly shifting competition.
Powell said hyperscalers are acting as if “coming second would effectively leave them out of the market,” a mindset that has driven an intense race to secure components ranging from advanced chips to copper wiring.
“Capital expenditure is still accelerating, and much of that is flowing toward the infrastructure that makes AI possible,” Powell said. “If you are making chips, generating power or supplying materials, you are sitting in a clearer part of the value chain.”
Independent analysts note similar trends. Maria Healy, a London based technology strategist at Circle Analytics, said firms tied to the hardware ecosystem are benefiting from unusually long visibility on orders.
“What stands out is the length of the procurement cycles,” Healy said. “Tech giants are locking in supply for years, which strengthens the case for looking at suppliers rather than purely software players.”
Recent forecasts underline the scale of the shift. S&P Global estimates that data-center electricity demand could nearly double by 2030, driven by hyperscale and enterprise facilities as well as crypto mining sites.
US and Middle Eastern grid operators have already begun approving major expansions to meet expected growth. Amazon and Meta have each budgeted tens of billions of dollars annually for AI related infrastructure.
Several analysts argue that this pace of spending resembles the early stages of the cloud computing build out more than a late cycle peak.
“The AI capex boom is still in its formative years,” said Khalid Farouqi, an energy sector economist at the Dubai based Institute for Digital Futures. “The demand for power alone suggests we’re nowhere near saturation.”
Suppliers say the surge in demand is reshaping their operations. At a copper-wire manufacturing plant in South Korea, shift manager Jae-Min Lee said new orders have surged since early summer.
“We have extended working hours twice this year,” Lee said. “Clients want faster delivery windows, and many of them are data center contractors.”
In Arizona, where semiconductor expansion is ongoing, electrician Rebecca Holt said the pace of construction has grown noticeably.
“These new facilities are bigger and more complex than anything we’ve built before,” Holt said. “A lot of workers believe this cycle will run for several more years.” Local officials also see long term implications.
“Our biggest challenge is power availability,” said Dana Calhoun, a regional utilities regulator in Nevada. “Data center proposals are coming in monthly, and every company wants guaranteed supply. It’s unlike anything we’ve dealt with.”
BlackRock’s comments suggest the BlackRock AI investment strategy will continue concentrating on suppliers rather than AI model developers.
The firm has pointed to chipmakers, energy producers and construction focused industrials as examples of potential long term beneficiaries.
Powell said credit markets also remain underutilized by major tech companies, a factor that could extend the investment cycle as firms seek new funding channels.
Independent experts caution that risks remain, including potential oversupply if companies build too aggressively.
But many believe the pace of AI infrastructure spending, combined with global competition among hyperscalers, provides momentum that could carry well into the next decade.
As companies race to secure dominance in artificial intelligence, BlackRock is steering its strategy toward the firms that supply the hardware and power behind the technology.
The BlackRock AI investment outlook reflects a broader view among investors that the strongest and most stable gains may come from the industry’s foundation rather than the algorithms it supports.
With spending still accelerating, suppliers appear poised to remain central players in the rapidly expanding AI ecosystem.
