Private infra, real estate capital to play larger financing role in AI data center boom, Goldman says
FILE PHOTO: A message reading "AI artificial intelligence," a keyboard and robot hands are seen in this illustration created on January 27, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
June 3 : Private infrastructure and real estate capital are expected to play a larger role in financing the AI-driven data-center boom, as companies move beyond traditional forms of funding, Goldman Sachs said in a note on Tuesday.
• Goldman increased its combined capex forecast for the four largest hyperscalers - Meta, Microsoft, Amazon, and Alphabet - to $5.3 trillion between fiscal years 2025 and 2030.
• Prior to the start of first-quarter earnings, the Wall Street brokerage forecast capex at $4.5 trillion for the same period.
• Goldman expects companies will tap into public, securitized and private markets to attain the scale and scope of this funding need.
• "Private infrastructure and real estate will play an even larger role in the years ahead," Goldman said.
• The boundaries between private infrastructure and real estate are blurring as data center projects extend into different categories such as land, power, building and equipment.
• Private infrastructure's structured income generation and inflation-protection characteristics will likely boost further growth, the brokerage said.
• "Infrastructure sits at the epicenter of multiple structural tailwinds, which we expect will drive its growth and provide additional capacity for financing," Goldman added.
• From 2021 to 2024, the private infrastructure market grew at an annualized rate of roughly 11.5 per cent, Goldman said.
• Goldman expects this growth rate to increase, potentially closer to the 16 per cent to 17 per cent annualized growth that prevailed for much of 2012 to 2021.
• This growth rate would push the infrastructure assets under management (AUM) comfortably above $3 trillion by 2030, the brokerage added.
