Why AI Investors Are Overlooking the Real Infrastructure Play

When people talk about AI investments, the conversation always circles back to the usual suspects: Nvidia, Microsoft, Alphabet. But here’s what most miss—the infrastructure that powers all these AI breakthroughs sits in unglamorous buildings scattered across the globe. And that’s exactly where the opportunity is.

The Data Center ETF That Bridges Two Worlds

Most AI ETFs are packed with tech megacaps, but Global X Data Center & Digital Infrastructure ETF (NASDAQ: DTCR) takes a fundamentally different approach. The fund splits its allocation between 51.8% technology stocks and 45.2% REITs—a stark contrast to traditional AI funds that lean almost entirely on pure-play tech.

This blend isn’t accidental. It reflects a reality most investors overlook: data centers aren’t just warehouses. They’re the backbone of AI infrastructure, and the companies that own them—Equinix and Digital Realty Trust among them—command real pricing power. These two names alone represent 21.35% of the data center ETF’s portfolio, yet they’re barely visible in standard AI funds.

The Numbers Tell the Real Story

The scale of spending growth is staggering. In 2024 alone, global data center expenditures jumped 51% year-over-year to $455 billion. Looking ahead, analysts at JPMorgan Chase are projecting data center capex could hit $5 trillion over the next five years. Just last week, Alphabet announced $40 billion in investment for Texas data centers—a single commitment that underscores the velocity of this trend.

By 2029, global data center revenue is expected to hit $624 billion, up from $416 billion in 2024. That’s roughly 50% growth in five years. And here’s the kicker: most of that revenue flows directly to property owners and operators.

The performance reflects this opportunity. Year to date, the data center ETF has climbed roughly 27%, acting more like a growth tech fund than a typical real estate play. Compare that to the largest real estate ETF, which is up just 3.6%, and the divergence becomes obvious.

Scarcity Creates Leverage

Think about it from a landlord’s perspective. Data center properties are scarce—bringing new facilities online takes 12 to 18 months. And here’s what really matters: U.S. data center vacancy rates have been declining for nearly a decade.

That’s powerful. When vacancy is falling, landlords aren’t competing on price—they’re negotiating from strength. Most facilities in the ETF’s roster are operating near full capacity, and many are locking in 10+ year lease agreements at premium rates. In a market where supply can’t easily scale to meet AI-driven demand, being the property owner is the enviable position.

The Window Is Now

The convergence of factors—exponential data center demand from hyperscalers, structural supply constraints, rising occupancy rates, and multi-year lease agreements—creates an unusual setup for real estate investors. The data center ETF taps into this intersection where scarcity, demand, and pricing power all align.

For investors seeking AI exposure beyond the typical semiconductor and software plays, the data center ETF offers a way to own the physical layer that everything else depends on.