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How Data Centers Are Powering the Next Wave of The AI Boom

  • Writer: VinVentures
    VinVentures
  • Aug 17
  • 4 min read

Updated: Oct 3

The global artificial intelligence (AI) gold rush is not just in algorithms and applications; it’s in data centers and the physical infrastructure that powers AI. Across the world, tech giants are pouring hundreds of billions of dollars into AI infrastructure, especially data centers packed with high-end servers and networking gear. 


This immense capital outlay is creating profound ripple effects far beyond Silicon Valley. It’s delivering windfalls to industries as varied as manufacturing, construction, materials, and energy, all of which are crucial in constructing and equipping these digital-age factories.  


The question on everyone’s mind: How long can this breakneck investment in AI infrastructure continue, and what happens when the frenzy cools off? 


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Data Centers at the Core of AI Expansion 


Massive data center facilities, filled with row upon row of servers, have become the backbone of AI’s rapid expansion. The scale of investment today is staggering. Industry leaders like Microsoft, Alphabet (Google), Meta, and Amazon are racing to expand their data processing capabilities, while new AI-focused startups (such as Anthropic and xAI) are also joining the fray. 


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Source: Morgan Stanley (2025) 


Morgan Stanley forecast, AI infrastructure spending could hit $3 trillion by 2028; a scale compared to transformative waves like electricity or the Internet. AI is rapidly permeating workplaces and daily life, driving demand for cloud computing capacity, training infrastructure for ever-larger AI models, and massive data storage capabilities. Hyperscale data centers (AWS, Google Cloud, Azure, etc.) are the modern-day oil fields, producing the computational energy fueling AI innovation. This boom is already a rising tide lifting multiple industries. It’s a virtuous cycle: AI ambitions drive infrastructure investment → which boosts orders for heavy equipment, construction materials, and energy → which, in turn, strengthens the broader economy. 


The Biggest Beneficiaries and Where Capital Is Flowing


The AI data center boom has become a rising tide lifting many boats, far beyond Big Tech itself. Industries that don’t look like “tech” on the surface, construction firms, power equipment makers, cooling system providers, and fiber-optics suppliers,are seeing unprecedented demand.

  • Amphenol: Acquired CommScope’s connectivity unit for $10.5B; 40% of that unit’s revenue tied to data centers. Stock has surged ~150% in two years, market value now above $130B.

  • Vertiv Holdings: Power and cooling systems supplier; stock has quadrupled in two years, with operating profits up 36% in 1H 2025.

  • Caterpillar & Cummins: Supplying backup generators and power equipment; Caterpillar’s sales of power generation units rose 19% in Q2 2025.

  • SPX Technologies: Stock up 40% YTD; its new cooling systems allow operators to balance water conservation and energy efficiency.


These firms are selling the “picks and shovels” of the AI gold rush, and investors are rewarding them handsomely. As SPX’s CEO Gene Lowe put it, hyperscalers prefer not to depend on a single supplier, leaving room for multiple players to thrive. Naturally, capital is following this momentum. The boom is not only enriching established industrials but also spawning opportunities for startups in cooling tech, advanced semiconductors, renewable-powered grids, and optimization software. Meanwhile, the world’s largest asset managers are taking strategic positions across the AI infrastructure value chain:

  • Apollo Global Management ($650B AUM): Took a majority stake in Stream Data Centers, betting on long-term, utility-like AI cash flows.

  • Blackstone ($1T AUM): Acquired QTS Realty Trust for $10B in 2021—once seen as niche real estate, now a hyperscale giant in the U.S. & Europe.

  • Brookfield Asset Management ($900B AUM): Launched a dedicated AI infrastructure strategy (Aug 2025), leveraging strengths in renewable energy and construction to solve bottlenecks.


Early innings, but clouds on the horizon 


Despite the enthusiasm, industry observers caution that this boom won’t last indefinitely. Right now, companies are in a land-grab phase, spending aggressively to secure AI capacity. Two possible paths ahead: 

  • Overshoot and pullback: AI firms may build far more capacity than the market needs in the medium term, forcing painful consolidation. 

  • Sustained growth: demand keeps rising, and utilization eventually catches up, much like internet infrastructure in the late 1990s enabled the cloud revolution a decade later. 


The truth is likely somewhere in the middle. Spending at current levels is unsustainable forever. Eventually, hyperscalers will shift from expansion to optimization, moving from building more centers to making better use of the ones they already have. Momentum is strong now, but a slowdown is inevitable. 

 

Opportunities and Risks Ahead for Startups and Venture Capital 


The AI infrastructure boom brings both extraordinary opportunities and real risks for startups and investors. 

  • Opportunities: Startups with defensible technologies,cooling, chips, energy solutions, workload management, are well-positioned to capture value. Hyperscalers’ reluctance to rely on single suppliers opens the door for nimble, innovative players. 

  • Risks: Companies tied too closely to hyperscaler spending may face sharp slowdowns once expansion eases. For example, construction-tech startups thriving on today’s data center wave could see demand evaporate just as quickly. 


Agility will be the defining trait. Founders should design products that can pivot across markets, enterprise IT, edge computing, or slower-moving international regions. For VCs, the discipline lies in backing companies solving enduring pain points like efficiency, cost, and sustainability, rather than chasing those buoyed only by hyperscaler capex. 


For VinVentures and other forward-looking funds, this is an era of immense opportunity, but also one demanding rigor and long-term perspective. The future of AI infrastructure will be built not just on ambition, but on resilience, the ability to withstand tomorrow’s inevitable cooldown while capturing today’s growth. 

 

Sources: 


ainvest. SPX Technologies (SPXC) earnings outperformance, guidance hike signal long-term buy potential as industrial sector shifts. ainvest. https://www.ainvest.com/news/spx-technologies-spxc-earnings-outperformance-guidance-hike-signal-long-term-buy-potential-industrial-sector-shifts-2508/?utm_source=chatgpt.com 


Caterpillar Inc. 2Q 2025 Caterpillar Inc. earnings call transcript. Caterpillar Inc. https://s25.q4cdn.com/358376879/files/doc_financials/2025/q2/2Q-2025-Caterpillar-Inc-Earnings-Call-Transcript_8-5-2025.pdf 


Bond, S. Apollo bets on AI data centre boom with Stream stake. Financial Times. https://www.ft.com/content/7052c560-4f31-4f45-bed0-cbc84453b3ce?utm_source=chatgpt.com 


Hook, L. Brookfield intensifies push into AI infrastructure. Financial Times. https://www.ft.com/content/b5381dac-15dd-46d5-a560-0f62386a961e?utm_source=chatgpt.com 


Investopedia Staff. Vertiv Holdings stock rises as data center firm raises full-year outlook. Investopedia. https://www.investopedia.com/vertiv-holdings-stock-rises-as-data-center-firm-raises-full-year-outlook-11781612?utm_source=chatgpt.com 


Morningstar Equity Research. Amphenol–CommScope deal widens data center opportunity and comes at a fair price. Morningstar. https://www.morningstar.com/company-reports/1318904-amphenol-commscope-deal-widens-data-center-opportunity-and-comes-at-a-fair-price?utm_source=chatgpt.com 


Morgan Stanley Research. The AI diffusion: Tech roundtable. Morgan Stanley. https://www.morganstanley.com/insights/articles/ai-diffusion-tech-roundtable 


Roumeliotis, G., & Ranasinghe, D. Blackstone to take QTS Realty Trust private in $10 bln deal. Reuters. https://www.reuters.com/business/blackstone-take-qts-realty-trust-private-10-bln-deal-2021-06-07/?utm_source=chatgpt.com 




Michaels, D. Brookfield Asset Management sets sights on “in-the-box” AI investments. The Wall Street Journal. https://www.wsj.com/articles/brookfield-asset-management-sets-sights-on-in-the-box-ai-investments-7bba605c?utm_source=chatgpt.com 


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