Private infra, real estate capital to play larger financing role in AI data centre boom

KUALA LUMPUR: Private infrastructure and real estate capital are expected to play a larger role in financing the AI-driven data centre 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 US$5.3 trillion between fiscal years 2025 and 2030.

Prior to the start of first-quarter earnings, the Wall Street broking forecast capex at US$4.5 trillion for the same period.

Goldman expects companies will tap into public, securitised 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 centre 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 broking said.

"Infrastructure sits at the epicentre 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 annualised 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 annualised growth that prevailed for much of 2012 to 2021.

This growth rate would push the infrastructure assets under management (AUM) comfortably above US$3 trillion by 2030, the broking added.