Research from the Brookings Institution warns of enormous investments in AI infrastructure, running into trillions of dollars, and growing risks as financing shifts towards opaque off-balance-sheet arrangements.
Key takeaways
- Investment in AI infrastructure—including data centres, power systems, networking infrastructure and specialised chips—is projected to reach $10.3 trillion between 2025 and 2032.
- Relative to the size of the economy, this investment exceeds previous major US infrastructure booms.
- Risks in the AI investment race are shifting from transparent balance-sheet financing to opaque off-balance-sheet mechanisms, such as joint ventures and securitisation.
- These off-balance-sheet arrangements depend on AI companies’ cash flows and collateral values, both exposed to uncertain AI demand and rapid technological change.
- Policymakers are advised to improve measurement and transparency while the industry’s capital structure is still taking shape.
What this means for CEOs
CEOs considering substantial AI investments or working with AI infrastructure providers should carefully assess financing structures and the risks of opaque funding to avoid unexpected systemic exposure.