What Is BlackRock’s Forecast for the AI Market?

Ben Powell, Chief Investment Strategist for the Asia-Pacific region at BlackRock, says that the wave of capital flowing into artificial intelligence infrastructure is nowhere near its peak. According to him, the clearest winners remain the sector’s “pick-and-shovel” providers — from chip manufacturers to energy companies and copper cable producers — while hyperscalers race to outspend each other with ever-larger investments.

Powell noted during Abu Dhabi Finance Week that the surge in AI-related capital expenditures shows no signs of slowing. Big tech companies continue to invest aggressively, driven by the belief that the race is “winner takes all.”

“The flood of capital continues. The money is very clearly directed,” he said, adding that BlackRock sees a “classic super-boom in capital expenditures” that still has plenty of momentum.

AI infrastructure is becoming one of the strongest drivers of global investment this year. This has been fueling the market rally, even as some investors question how long the cycle can last.

Nvidia — the chip giant whose GPUs lie at the heart of the AI revolution — briefly surpassed a market capitalization of $5 trillion. This has intensified discussions about a potential AI bubble.

Microsoft and OpenAI have also implemented a new corporate restructuring to support the financing of the ChatGPT developer. According to Reuters, OpenAI is preparing for a potential IPO with a valuation of around $1 trillion.

The sector is launching massive long-term orders — from chip deliveries to securing sufficient electricity supply. Power grids from the U.S. to the Middle East are racing to keep up with the explosive demand for new data centers. Corporations like Amazon and Meta are allocating tens of billions of dollars annually to AI-related investments.

S&P Global forecasts that electricity demand from data centers will double by 2030, driven by hyperscalers, corporate clients, colocation facilities, and crypto miners.

Powell adds that tech leaders are only beginning to tap capital markets to finance the next phase of AI expansion, which means a significant additional inflow of funds is still ahead.

He notes that hyperscalers are acting as though coming in second place would push them out of the market. This mentality is accelerating their investments, even at the risk of overshooting real demand.

According to him, much of this capital will continue to flow toward companies building the infrastructure — hardware, energy, and power grids — rather than primarily toward AI model developers. This reinforces the growing belief among global investors that the most sustainable growth in the AI cycle will come from the “backbone” of the technology.

“If we are the recipients of that cash flow, that’s an excellent place to be — whether you’re producing chips, energy, or copper cables,” Powell says, expecting “positive surprises” for these stocks next year.