Private infra, real estate capital to play larger financing role in AI data center boom, Goldman says

Private infrastructure and real estate capital are ​expected to play a larger ​role in financing the AI-driven ‌data-center boom, ​as companies move beyond traditional forms of funding, Goldman Sachs said in a note on Tuesday. * Goldman increased ‌its combined capex forecast for the four largest hyperscalers - Meta, Microsoft, Amazon , and Alphabet - to $5.3 trillion between fiscal years 2025 and 2030.

* Prior to the start of ‌first-quarter earnings, the Wall Street brokerage forecast capex at $4.5 trillion for the ‌same period. * Goldman expects companies will tap into public, securitized and private markets to attain the scale and scope of this funding need.

* "Private infrastructure and real estate will play an even larger role ⁠in ​the years ahead," ⁠Goldman said. * The boundaries between private infrastructure and real estate are blurring as data center projects ⁠extend into different categories such as land, power, building and equipment.

* Private infrastructure's structured income ​generation and inflation-protection characteristics will likely boost further growth, the brokerage said. * "Infrastructure sits ⁠at the epicenter of multiple structural tailwinds, which we expect will drive its growth and provide additional ⁠capacity ​for financing," Goldman added.

* From 2021 to 2024, the private infrastructure market grew at an annualized rate of roughly 11.5%, Goldman said. * Goldman ⁠expects this growth rate to increase, potentially closer to the 16% to 17% annualized ⁠growth that ⁠prevailed for much of 2012 to 2021.

* This growth rate would push the infrastructure assets under management (AUM) comfortably above $3 trillion by ‌2030, the brokerage ‌added.

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