September 24, 2026, (Inside AI) — The AI boom has pulled infrastructure investing into unfamiliar territory. Pension funds, insurers and sovereign wealth vehicles are pouring record sums into data centers and related digital assets, lured by the sector's growth story and a decade-long track record of steady returns. But the math is getting harder to justify as valuations climb and competition intensifies.
Private capital raised roughly $220 billion in 2025, pushing total assets earmarked for pipelines, ports, bridges and other critical facilities beyond $1.5 trillion, according to research firm Preqin. Digital infrastructure funds alone attracted nearly $160 billion last year, almost double the ten-year average, per PitchBook. The appeal is clear: infrastructure funds have not posted a losing year in a decade, and they returned more than 13% in 2025, second only to venture capital, according to MSCI.
Yet the entry price for AI-linked assets has become steep. Data-center enterprises traded at an average of 25 to 30 times EBITDA in the five years through early 2024, compared with 16 times for private infrastructure broadly, according to CBRE Investment Management. Listed giants Equinix and Digital Realty trade at just under 24 times expected 2026 EBITDA, per Visible Alpha. At 25 times EBITDA, a buyer starts with a 4% yield before maintenance, taxes and other cash costs. Even with rents rising 3% annually, generating a 12% return without debt hinges on robust renewal terms, rapid earnings growth or an even richer sale price. Borrowing can magnify gains but does not bridge the baseline assumptions.
Scarcity offers little safety. Server-farm vacancies in the eight largest US markets fell below 2% in the first half of the year, even as supply jumped 34% from a year earlier. With so little space available, investors wanting a foothold must build it themselves, taking on development risk. Mounting opposition, long queues for electrical connections and supply-chain delays add unpredictability.
Read: Flood of AI Debt
"Delivering on time is a genuine differentiator." Wes Cummins, CEO of data-center developer Applied Digital, said this, underscoring the operational challenges that separate winners from also-rans.
Recent results reveal a widening gap. As of July, the top quarter of funds raised in 2022 returned more than 21% a year, compared with less than 12% at the median and 5% for the bottom quartile. The spread was even wider for the 2023 vintage. It is also taking longer for investors to collect. By their fifth anniversary, the median fund raised in 2019 had returned just 13 cents for every dollar committed, according to McKinsey. For similar funds amassed a decade earlier, the comparable figure was 40 cents. More capital allocated to projects awaiting permits and power before generating income will likely pressure timelines further.
This creates opportunities in more conventional infrastructure. As governments confront stretched balance sheets and vast construction bills, they are increasingly looking to sell or lease mature assets and recycle proceeds into new projects. Brazil plans to auction 18 port terminals, despite a delayed timetable. Canada is seeking private capital to run airports longer-term in Toronto, Montreal, Vancouver and Calgary. India wants to raise more than $180 billion by 2030 from asset sales, concessions and private investment in roads, railways, power networks, ports and more.
Such investments are likely to keep growing. An estimated $100 trillion of new and upgraded infrastructure is needed through 2040 to meet rising demand for power, transport and computing capacity, McKinsey reckons. Established structures and systems are not necessarily bargains, however. AviAlliance's acquisition of AGS Airports last year valued the owner of Aberdeen, Glasgow and Southampton transport facilities at about 23 times EBITDA. In July, Terminal Investment Limited, backed by shipping company MSC, BlackRock's Global Infrastructure Partners and Singapore's GIC, paid $800 million, or 20 times EBITDA, for Mexico's Altamira port. Listed peers trade at multiples of around 9 to 14 times.
Crowds are unlikely to ease either. Some 730 infrastructure funds are in the market seeking a combined $460 billion worldwide, Preqin tallies. KKR's latest dedicated fund alone, its largest ever, raised more than $19 billion. Large money managers can tackle more complicated projects that demand deep pockets and specialized expertise, but the returns required to justify the approach will accrue to a relatively narrow group.
The range of valuations also plays a big role. Infrastructure assets with enterprise values of less than $500 million have consistently traded at lower EBITDA multiples than larger ones, Aviva analysts found. Fortune may favor fund managers eyeing assets before they turn into trophies.
Read: OpenAI Seeks $1.5 Trillion Valuation
AI is likely to create exceptional returns for some, but it is also turning largely defensive investments into riskier ones dependent on construction, demand and exit values. In a market remade with bold ambition, the safer route to returns will be the well-traveled one.
