BlackRock bets on ‘pick and shovel’ trade, singling out clear winners in AI spending spree (www.cnbc.com)

BlackRock's chief investment strategist for APAC, Ben Powell, announced that the surge in artificial intelligence infrastructure spending is far from its peak, positioning suppliers of essential components like chips and energy producers as the key beneficiaries of this expanding market. Speaking at the Abu Dhabi Finance Week, Powell highlighted a "picks and shovels" investment strategy, where hardware and materials firms are expected to experience steadier gains compared to model developers in a racing landscape dominated by tech giants scrambling to secure critical resources. This trend underscores the relentless capital expenditure on AI infrastructure, which has emerged as a significant driver of global investments in 2023. Major players like Nvidia have seen their market capitalization soar, while firms such as Microsoft and OpenAI have embarked on major fundraising efforts. Predictions indicate that power demand from data centers could double by 2030, primarily driven by advancements in AI and associated technologies. Powell suggests that as tech companies venture into capital markets to fund their AI expansion, investments will likely prioritize those infrastructure providers that facilitate the AI boom, indicating that sustainable growth in this sector might depend more on supporting technologies than on AI model development itself.