Thematic Spotlight: AI’s Infrastructure Boom Gains Momentum

Artificial Intelligence

The AI industry is rapidly evolving, but its next stage isn’t just about smarter algorithms—it’s about building the infrastructure to support them. That’s the premise behind Project Stargate, a $500 billion four-year initiative unveiled by President Trump in January, which aims to accelerate AI development by constructing next-generation data centers and securing the compute power needed for future breakthroughs.1

To kick off the project, a consortium of companies including Oracle and Abu Dhabi’s MGX have committed $100 billion upfront, making it one of the largest AI-oriented investment funds to date.2 Among the beneficiaries of that funding will be OpenAI, which is seeking to expand and diversify its computing resources away from Microsoft servers as demand for its models skyrockets.3 Meanwhile, SoftBank is looking to integrating AI across its entire ecosystem, with its group companies such as PayPay and LY Corp. expected to spend $3 billion annually on OpenAI’s tools.4

But whether such an ambitious effort will succeed remains an open question. Critics, including Elon Musk, have raised doubts over the financing behind Stargate and whether its backers can follow through on their commitments.5 AI infrastructure also depends on semiconductor supply, an area where constraints could slow down even the most well-funded projects. Meanwhile, Chinese startup DeepSeek has demonstrated that leaner, more cost-efficient AI models can challenge larger systems, forcing industry leaders to defend the necessity of such vast spending.6

Despite these concerns, the need for AI infrastructure remains largely unperturbed. As demand for computing power continues to surge, the world’s biggest companies continue to race to position themselves as the defining players of the next digital era. If Stargate and similar projects deliver on their promises, they stand to accelerate us into a future where AI becomes commoditised and is integrated with everyday life at an unprecedented scale.

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Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at  4/02/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.