Infrastructure enters 'super cycle' as AI and energy demand surges

The rapid expansion of Artificial Intelligence (AI), energy transition projects and emerging market growth is reshaping global infrastructure from a defensive asset class into a structural growth story, according to 4D Infrastructure investment director Tim Snelgrove.

Speaking in Sydney, Snelgrove said infrastructure investment was being driven by five simultaneous long-term forces; technology, decarbonisation, aging assets, population growth and emerging markets.

"These are trillion-dollar investment programs," he said.

"What's underpinning our outlook is that these things are happening regardless of geopolitics, trade wars or economic cycles," said Snelgrove.

He went on to say that AI adoption was accelerating demand for infrastructure in ways many investors still underestimated, particularly through the explosive growth of data centres.

Global data centre energy consumption is expected to almost double from 485 terawatt hours in 2025 to around 1000 terawatt hours by 2030. That's roughly the equivalent to Japan's current electricity consumption.

"The AI story doesn't work without infrastructure," he said.

The challenge, however, is not simply generating power but connecting it to already strained electricity grids. Snelgrove noted around 3000 gigawatts of power capacity additions globally are currently waiting for grid access approvals, highlighting what he described as a major bottleneck and investment opportunity,

Beyond AI, Snelgrove said ageing infrastructure across developed economies was becoming an increasing urgent issue.

In the UK, roughly 20% of water supply is lost daily through leaks, while the US more than 75,000 bridges have exceeded their intended lifespan.

"These are real world problems government and regulators are being forced to solve," he said.

Snelgrove also pointed to rising middle class populations in emerging markets as a key driver of long-term infrastructure demand, particularly in countries such as India where energy consumption is expanding rapidly.

"Every 18 months India is effectively adding Australia's entire electricity demand", he said.

He said the combination of regulated cash flows, long duration investment pipelines and structural demand growth was shifting listed infrastructure beyond its traditional reputation as a defensive yield allocation.

"We view it as one of the strongest asset classes from a long-term outlook perspective," he said.