Brookfield Corporation (BN 1.07%) believes artificial intelligence (AI) could become the most impactful general-purpose technology in human history. However, in order for AI to achieve its immense promise, the world needs to invest what's estimated to be a staggering $7 trillion in AI-related infrastructure over the next decade.
The leading global investment firm plans to be at the forefront of capturing this once-in-a-generation opportunity to build the backbone infrastructure to support this game-changing technology. The company and its affiliates are investing heavily to support each aspect of AI infrastructure development -- from data centers to renewable power -- positioning its business to deliver robust growth and strong returns in the years to come.
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AI needs infrastructure
Infrastructure is essential to our modern world. Without power plants and transmission lines, we wouldn't have electricity in our homes and businesses. Likewise, we couldn't use the internet, send text messages, or stream content without cell towers and fiber optic networks.
AI also requires infrastructure to thrive. It needs specialized data centers to house the GPUs, CPUs, networking, data storage, and advanced cooling systems needed to support large language models (LLMs). To build these massive AI factories, companies need real estate, infrastructure, power, and capital.
The capital need is massive due to the cost of land, computing power, and other infrastructure to support AI. Brookfield estimates that total spending on AI infrastructure alone will exceed $1 trillion by the end of 2029 and reach over $7 trillion within the next decade. Technology companies have significantly ramped up their capital spending, with hyperscalers (large cloud computing service providers) boosting their capex 50% this year to $400 billion. A big driver is that AI workloads require 10 times the computing power of non-AI workloads.
Building the backbone to support AI
Hyperscalers can't build out all this infrastructure on their own. They need partners to provide them with expertise, infrastructure, power, and capital. Few companies are in a better position to support the buildout of AI infrastructure than Brookfield Corporation. It has expertise across every aspect of the AI innovation cycle as it's a global leader in real estate, infrastructure, power, and capital solutions.
For example, the company's infrastructure subsidiary, Brookfield Infrastructure (BIPC -1.57%) (BIP 0.97%), has a global data infrastructure platform with investments in over 300,000 telecom towers, two U.S. semiconductor manufacturing foundries, miles and miles of fiber optic cable networks, and more than 140 operating data centers worldwide with over 1.7 gigawatts of contracted capacity. The company has been leveraging Brookfield's real estate expertise to acquire land to support future data center developments. It currently has the capacity to develop an additional 3.6 GW of data center capacity, representing a 50% increase from its development potential as of the end of 2023.
Meanwhile, Brookfield Corporation's renewable energy subsidiary, Brookfield Renewable (BEPC -2.25%) (BEP -0.68%), is becoming a key partner in helping power the AI megatrend. The company owns a leading global renewable energy portfolio spanning hydropower, wind, solar, and battery storage. It has become the partner of choice in helping support the power needs of hyperscalers. For example, earlier this year, Brookfield signed a first-of-its-kind hydro framework agreement with Google. It will potentially supply the technology giant with up to 3 GW of carbon-free hydropower in the U.S. in the coming years, the largest-ever corporate hydro deal. Brookfield also signed the largest-ever corporate power deal with Microsoft last year. It will deliver 10.5 GWs of renewable power to the tech titan by the end of 2030 by developing new projects across the U.S. and Europe.
Overall, Brookfield Corporation sees potential to leverage its capabilities and invest $200 billion in building AI factories across North America and Europe. This massive opportunity drives the company's belief that AI infrastructure will eventually become the largest business within its platform. This significant investment in AI infrastructure supports the company's conviction that it can achieve 25% annualized earnings-per-share growth over the next five years.
Positioned to capitalize on the AI infrastructure boom
Brookfield Corporation sees a massive opportunity to invest in AI infrastructure. It's capitalizing on this opportunity by leveraging its expertise in real estate, infrastructure, power, and capital solutions to invest in supporting the buildout of AI infrastructure across its platform. These investments could help drive robust earnings growth across its platform, making Brookfield a great stock to buy to cash in on this once-in-a-generation opportunity to build out AI infrastructure.
