The boom in AI infrastructure creates new questions for advisers and their clients

The data centre boom shows little sign of slowing, with the Reserve Bank of Australia (RBA) indicating in its latest interest rate decision that the sheer investment in these facilities now has an influence on monetary policy.
The RBA’s August Statement on Monetary Policy noted that GDP grew by 2.5% over the year to the March quarter, underpinned by continued growth in consumption and elevated levels of business investment largely fueled by data centres.

“The global AI investment boom could generate greater inflationary pressures than assumed. The ramp up of investment in data centres may also contribute to pricing pressures domestically, particularly by drawing on resources in the construction industry,” it said.

That may not be welcome news for interest-rate sensitive borrowers. But it underscores the extent to which data centres, and AI infrastructure generally, could become more common holdings in investors’ portfolios over time.
The Australian data centre market alone is forecast to grow to US$7.25 billion in 2026 and US$8.92 billion by 2031 – as part of a global trend in which worldwide data centre capacity is expected to roughly double in the same period. 

Private Australian companies have already capitalised on the forecast demand, with AirTrunk acquired by Blackstone, one of the world’s largest alternative asset managers, for $24 billion in 2024. Meanwhile, Firmus Technologies recently announced it had raised US$2 billion in a strategic equity investment round to scale its Australian operations and fast-track its capacity to expand into the wider Asia Pacific region.

Public market plays

Investors are watching listed companies to determine if the dynamics driving those eye-catching numbers will somehow apply to public markets too, or if there is hype around the sector that will sometimes fail to translate into equity returns.

"AI infrastructure will, over time, become an 'intelligence superhighway' that provides significant net benefits to economies around the world," Stephen Byrd, Morgan Stanley's Global Head of Thematic and Sustainability Research recently said.

Byrd was speaking more broadly than just data centres but did note their development faces shorter-term challenges, including shortages of skilled labour, constraints on electricity availability and growing opposition.
"We view this broadly as a valid concern, though we see this as more of a speed bump rather than a brick wall," he said.

In Australia, a number of ASX-listed companies have exposure to the data centre sector including NEXTDC (ASX: NXT), real estate investment trusts DigiCo (ASX: DGT) and Goodman Group (ASX: GMG), as well as infrastructure conglomerate Infratil (ASX: IFT) and Macquarie Technology Group (ASX: MAQ).

However, other companies have a data centre element to their business. Stockland Corporation (ASX: SGP), for example, announced in March that it had formalised a joint venture to develop data centres as part of a longer-term plan to allocate 10% of its capital to the asset class. 

Globally, Nasdaq-listed REIT Equinix (NASDAQ: EQIX) and Digital Realty Trust (NYSE: DLR) are among the biggest data centre stocks. Hyperscale cloud providers like Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) also have data centre interests within their broader business mix.

The ETF angle

Exchange traded funds (ETFs) can provide exposure to companies associated with the data centres sector, though typically via vehicles with exposure to a broader range of AI-related assets. The Global X Artificial Intelligence Infrastructure ETF (ASX: AINF) invests across that value chain – including in companies involved in electric supply, energy management, data centre equipment manufacturing, and copper and uranium production. 

The Resolution Capital Global Property Securities – Active ETF (ASX: RCAP) takes a different tack. It invests in a select number of global listed real estate securities and, at 31 July 2026, it had a more than 12% weighting to data centres and towers. Both Equinix and Digital Realty Trust were among its five biggest holdings.

Offshore-listed ETFs available via the AUSIEX international trading platform include the Global X Data Centre & Digital Infrastructure ETF (NASDAQ: DTCR) and the VanEck Data Center Supply Chain ETF (CBOE: RACK).

The former has net assets of US$2.23 billion and tracks the Solactive Data Center REITs & Digital Infrastructure Index. Its biggest holdings are Digital Realty Trust, Equinix, American Tower Group (NYSE: AMT) and Crown Castle (NYSE: CCI).

Community concerns mount

Data centre companies have more than the usual questions from stock market analysts to contend with as they seek to attract investors. Community disquiet – both in Australia and abroad – about the impact of data centres on residents is growing steadily.

One independent study found that at least 25 data centre projects in the US were cancelled in 2025 alone due to local opposition. The report, published by the Electric Power Research Institute in June 2026, found that community acceptance has become a core project delivery constraint alongside power, water and permits.

The consequences are significant. JP Morgan has identified community considerations as a factor that developers must assess prior to breaking ground on a project, recommending “this goes beyond paperwork to include public hearings and stakeholder negotiations”.

Developments in Australia may also need to meet new standards announced by the Federal Government in July to allay typical community concerns, while also recognising the potential contribution of the AI build-out to the economy. The proposed standards include an obligation for data centres to underwrite their own power supply, reduce power when needed to strengthen the grid, and be as water efficient as possible. 

“The Federal Government will also work with State and Territories to ensure large data centres are built in the most appropriate locations, and with input from local communities,” according to the announcement.

Data centres appear on track to be among the dominant infrastructure assets of our time. But whether that translates into early gains for equity investors in the sector will ultimately depend on a range of factors – from financial to non-financial.

 

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