03 Feb 2025
Data Centers: The Unsung Heroes of AI Innovation
VistaShares Investment Committee

Artificial intelligence (AI) is transforming industries at an unprecedented pace, but the backbone of this revolution lies in data centers—critical infrastructure driving AI’s explosive growth.
Recent developments highlight the scale of the opportunity: Microsoft announced plans to spend $80 billion in fiscal 2025 to expand its Azure infrastructure, aiming to outpace Amazon Web Services (AWS) and Google Cloud.1 Collaborations like the Global AI Infrastructure Investment Partnership (GAIIP) are targeting $100 billion in investments to scale data center and energy infrastructure.2 These announcements underscore how valuable foundational data centers are to the AI revolution.
Goldman Sachs predicts that the global power demand from data centers will increase 160% by 2030, driven by advanced AI workloads.3 These facilities could soon consume more electricity than entire cities, with some demanding over 1 gigawatt of power—double the residential consumption of cities like Pittsburgh.4 It’s clear that we’re just scratching the surface of AI’s infrastructure needs, creating a major opportunity for companies and investors.
For example, there is pent-up demand for data centers as vacancy rates are and related capacity are at all-time lows. A shortage of data center capacity has led to a 20–30% year-over-year increase in asking price among major U.S. Data Center markets.5 In order to meet the outsized forecasted demand, data center construction is kicking into overdrive.
Data Center Power Consumption by Providers/Enterprises6

U.S. Data Center Absorption Rates and Construction7

The Hidden Complexity of AI Infrastructure
When people think about investing in AI, they often focus on semiconductor giants. While these companies clearly play an essential role, the AI supply chain is far more complex than just chips.
“Many look at companies like Nvidia (NVDA) or Broadcom (AVGO) and assume they represent the whole AI story, but the stack is more complex,” says Sunny Madra, President of Supply Chain, Operations and Go-to-Market at Groq, and Advisor to the Investment Committee at VistaShares ETFs. “To fully capture AI, you need to consider the entire vertical integration, from the chips to memory, cooling systems, DRAM (dynamic random-access memory), and even the diesel generators running data centers. Many thematic AI ETFs focus on popular names like Nvidia, but they miss essential parts of the supply chain in areas like IT and network equipment, backup and recovery solutions, and racks and cable management.”
This is where VistaShares AI Supercycle™ ETF (AIS) stands out. Unlike AI ETFs that primarily target semiconductors and well-known technology stocks, AIS is designed to invest across the entire AI ecosystem, not just consumer-facing applications.
Why Data Centers Are Just Getting Started
Data centers are in the early innings of their development to support AI. Currently, 70% of future data center demand is tied to AI workloads, with advanced models requiring exponentially more energy and computational power.8
Beyond computing power, energy consumption is becoming a defining factor for data center innovation. With facilities consuming megawatts of electricity, innovative solutions are required to address power and heat challenges. Technologies like liquid cooling and modular reactors are being explored to make data centers more energy efficient. Collaborations with energy firms and investments in off-grid solutions are also becoming critical as the industry works to reduce its environmental footprint.
Data Centers: The New “Picks and Shovels”
In the early days of the internet, infrastructure companies like Cisco Systems (CSCO) and Intel (INTC) became essential to the dot-com boom, just as shovel manufacturers were critical during the Gold Rush. Today, data centers represent the “picks and shovels” of the AI revolution. Cloud computing sales are expected to rise to $2 trillion by 2030, with generative AI expected to account for about 10–15% of the spending.9 This growth offers significant opportunities for innovative companies that supply everything from DRAM and GPUs to liquid cooling systems and backup power generators.
Investing across the data center supply chain allows us to capture these opportunities. AIS is designed to focus on the infrastructure that supports AI, ensuring our investors are well-positioned for potential long-term growth.
The Road Ahead
The AI industry is in phase one of its development, with the bulk of investment still focused on infrastructure. Data centers and semiconductors form the foundation of this growth.
“AI is still in the early phases of its growth,” Madra said. “We’ve gone through multiple generations of models like ChatGPT, with each one requiring 10 times more energy than the previous one. While training AI models has been energy-intensive, the bigger challenge ahead lies in the inference phase, which will drive the next wave of applications.”
By investing across the entire supply chain, we believe AIS provides exposure to companies that are indispensable to the future of AI. From energy-efficient cooling technologies to advanced computing hardware, we aim to capture the full scope of opportunities in this rapidly expanding sector. Data centers may not grab headlines like Nvidia, but they are the unsung heroes of AI innovation, and their importance will only grow as AI continues to reshape the world.
1 Sources: Microsoft, Fiscal Year 2025 Investment Plans; Allied Market Research, Data Center Growth Trends Report.
2 Source: Global AI Infrastructure Investment Partnership (GAIIP), 2024 Strategic Overview.
3 Source: Goldman Sachs, AI Infrastructure Growth Report, 2023.
4 Source: International Energy Agency (IEA), Data Center Energy Consumption Analysis, 2023.
5 JLL Newsroom, “AI and cloud adoption propel data center demand to record levels for 2023,” 2023.
6 McKinsey, “Investing in the rising data center economy,” 2023.
7 CoStar, “Data Center Supply Isn’t Keeping Up With Demand,” 2023
8 Source: International Data Corporation (IDC), The Future of AI Workloads in Data Centers Report, 2023.
9 Source: Cloud revenues poised to reach $2 trillion by 2030 amid AI rollout, Goldman Sachs, 2024.
Led by industry veterans, VistaShares ETFs leverages decades of experience in portfolio construction and strategic investment. Our team blends academic rigor with real-world insights, tapping into the expertise of top scholars, seasoned investors, and industry trailblazers. This unique combination empowers us to deliver tailored investment strategies designed to drive performance and long-term success.
Learn more about VistaShares ETFs at www.VistaShares.com.
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