**Funding the Future: How Capital is Powering the Data Center Revolution and Beyond**
*By Lizzie O’Leary and Femi Oke*
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The amount of data used worldwide is growing at a staggering pace, yet the infrastructure needed to support this growth has not yet been built at the necessary scale or level of complexity. This gap presents a massive opportunity—and a pressing need for capital investment.
**Why Funding Matters in the Infrastructure Transformation**
Eric Janson, Global Private Equity and Principal Investors Leader at PwC US, explains that these infrastructure transformations—whether digital, like data centers, or related to energy transitions—are extremely capital intensive. “We’re talking about massive multibillion-dollar investments over multiple years,” he says.
Such large-scale projects cannot be funded by a single company or investor alone. Instead, a diverse mix of private equity, infrastructure funds, institutional investors, sovereign wealth funds, and government partnerships is essential. The way these projects are financed will ultimately determine the speed, scale, and success of this transformation.
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**Data Centers: The Digital Backbone**
Data centers serve as the foundation of the digital economy, supporting everything from daily banking to global communications. Yet building and operating them is complex and expensive.
Brookfield’s Managing Partner in Infrastructure and CEO of their Global Data Center Group, Udhay Mathialagan, shares insights into how data centers have become a critical part of their investment strategy. Over the past seven years, Brookfield has built a platform comprising six businesses, operating more than a hundred data centers across 17 countries.
“Data centers are becoming as important as traditional critical infrastructure like transport or electricity,” Udhay notes. With data creation accelerating dramatically—more data was created in the last three years than in all prior history combined—the infrastructure to store and manage this data must grow correspondingly.
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**What This Means for Businesses in Every Industry**
Even companies outside the traditional tech sphere are increasingly reliant on data. “Data is embedded in almost every product and process,” says Udhay. AI, which is permeating nearly every sector, depends on data centers for processing power and connectivity.
In the near future, having robust access to data and AI capabilities will become unavoidable for all industries. This ubiquity makes data infrastructure a vital investment area for businesses seeking to stay competitive.
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**Challenges and Opportunities for Investors**
Funding data centers involves substantial sums, specialized expertise, and managing complex technical and logistical challenges.
– **Capital Intensity:** These large-scale projects require large pools of money and long-term commitments.
– **Technical Complexity:** Data centers house powerful GPUs that generate significant heat, demanding advanced cooling and substantial power supplies. In some locations, scarcity of power challenges developers to coordinate power generation alongside data center construction.
– **Broad Partnerships:** Unlike traditional real estate, data center development involves coordination with governments for permitting, energy providers for reliable power, equipment suppliers for long lead-time systems, and local communities.
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**Balancing Growth with Community Concerns**
Data center projects can raise valid concerns about resource consumption—particularly power and water—and community impact. Transparency and education are key to addressing these issues.
“Developers need to openly present the trade-offs, showing both the benefits and costs to the community,” Udhay emphasizes. Beyond job creation and investment, data centers promote economic ecosystems by connecting with other infrastructure, creating a multiplier effect.
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**The Wider Societal Benefits**
Data centers power everything from AI to daily logistics, underpinning the modern economy. They enable essential services like banking, transportation, and communication, making them integral to daily life worldwide.
“These facilities are the heartbeat of the economy,” Udhay states. “Without them, key parts of society simply wouldn’t function.”
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**Looking Ahead: Scaling Investment for the AI Era**
Brookfield projects that approximately **US$7 trillion** will be needed to build out the AI ecosystem over the next decade, with nearly **US$2 trillion** focused on physical infrastructure like data centers.
“This will be a period of significant development to catch up with current and future data demands,” Udhay predicts. The scale of investment and expertise required is immense, making collaboration across capital sources and specialties essential.
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**Capital’s Central Role in Other Critical Infrastructure**
Eric Janson highlights that data centers are just one piece of a broader puzzle. Other infrastructure areas requiring massive investments include:
– **Energy Transition:** Renewables, nuclear power, grid modernization, and battery storage.
– **Transportation and Logistics:** Ports, railroads, airports, and supply chains needing upgrades to meet global trade demands.
Meeting these challenges demands not only private capital but also partnerships with governments and corporations to manage risk and complexity.
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**Innovative Partnerships in Infrastructure Investing**
One notable example is the **AI Infrastructure Partnership**, a collaboration between Abu Dhabi-based investment firm MGX (backed by sovereign wealth fund Mubadala) and AI company G42.
This partnership has secured a **US$30 billion equity commitment**, with plans to leverage additional lending to reach **US$100 billion** of capital to address data center needs globally over the next 10-20 years.
Such ventures illustrate how combining capital, technology, and energy expertise can power transformative infrastructure projects on an unprecedented scale.
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**Emerging Trends in Financial Services Investment**
New investor profiles are entering infrastructure funding:
– **Insurance companies**, especially life insurers, are increasingly investing in infrastructure to better match long-term liabilities with stable returns.
– **Sovereign wealth funds and pension funds**, traditionally passive investors, are becoming more active in direct long-term investments to support economic sustainability and social infrastructure.
These shifts point to a growing appetite for infrastructure assets that offer long-duration, stable returns while supporting vital societal needs.
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**Societal Impact and Economic Growth**
Large-scale infrastructure investments underpin economic competitiveness and societal well-being. Renewable energy infrastructure promotes energy independence and cleaner air. Modern transportation improves connectivity and market access.
Eric notes, “Societies that invest in these assets position themselves to attract future industries and provide more opportunities for their people.”
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**Looking to the Future: What Investors Should Watch**
Capital needs will continue to grow and diversify globally. Eric foresees more “formalized blended models of financing,” where public and private capital work hand-in-hand. Governments, often limited in public funds, will need to collaborate more closely with private investors who can share risks and resources.
Sustainability will shift from “optional to mandatory.” Investors will demand that projects demonstrate:
– Low carbon emissions
– Resilience to environmental and economic risks
– Positive societal impact
Although this transformation is complex and long-term, the evolution of capital deployment will be fundamental to its success.
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**Conclusion**
The digital and infrastructure revolutions require unprecedented capital commitment and innovative financing structures. From powering data centers to enabling clean energy and modern transport, strategic investment partnerships are key to building a sustainable, connected future.
As Lizzie O’Leary and Femi Oke conclude, “You can’t do it alone.” The future depends on collaboration among investors, governments, companies, and communities to turn these ambitious infrastructure visions into reality.
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*For more insights on how finance is shaping the future of business and society, listen to “Take on Tomorrow,” the podcast from PwC’s management publication, Strategy+Business.*
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**About the Authors:**
Lizzie O’Leary is a journalist and podcaster specializing in business and finance.
Femi Oke is a broadcaster and journalist focused on economic trends and societal impact.
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