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9 October 2025
Insights by DBS Group Research
Investing in the foundations of AI: Opportunities beyond tech
As artificial intelligence (AI) continues to grow and integrate into more parts of the economy, markets are beginning to focus not just on tech companies, but also on the sectors that support this transformation behind the scenes.
Utilities: A defensive play supporting AI growth
The utilities sector – which includes companies that provide essential services like electricity and water – is becoming a strong indirect beneficiary of the AI boom. Even though it’s facing challenges such as high interest rates and the potential rollback of the US Inflation Reduction Act, the sector remains resilient.
One major reason is the soaring energy demand from data centres. The International Energy Agency expects global electricity usage by data centres to double to 945 terawatt-hours (TWh) by 2030. In response, utility companies are increasing their capital expenditure to improve infrastructure and meet this demand. This shows that utilities are well-positioned to support the future of AI in a steady, lower-risk way – making them a defensive investment option.
Nuclear Energy: Clean, reliable power for the AI age
Nuclear energy is getting renewed attention as the world seeks clean and reliable energy sources. Why nuclear? It has a "constancy factor" of 92%, meaning it operates nearly all the time – the highest reliability of any energy source. This makes it ideal for AI data centres, which require power 24/7.
Recent deals between nuclear energy providers and major tech firms (like Constellation with Meta and Talen with Amazon) show growing acceptance of nuclear as a clean, scalable and affordable energy solution for the AI-driven world.
Copper: A core material for electrification and AI hardware
Copper is becoming increasingly important due to its vital role in electrification, digital infrastructure and AI hardware. Its high conductivity and durability make it perfect for use in AI systems and data centres.
BHP, the world’s largest copper producer, expects global copper demand to increase by 70% to 50 million tonnes per year by 2050, growing at an average of 2% annually. Specifically, copper usage in data centres is expected to increase sixfold, from 0.5 million tonnes today to three million tonnes by 2050.
Despite global trade challenges, copper prices have already risen about 10% year-to-date. Prices are expected to stay strong, as supply remains tight and copper has few viable substitutes in many industries.
Data Centre REITs: Real estate backbone of AI
While large tech companies (known as hyperscalers) often make headlines for their massive data centre spending, many of them rely on colocation providers – companies that rent out data centre space to multiple clients. These providers are usually structured as REITs.
REITs offer a liquid and accessible way for investors to gain exposure to the growing data centre market. This positions data centre REITs as an attractive option for investors looking to benefit from the AI trend through real estate assets.
What this means for investors
As AI adoption spreads, so does the demand for the physical and infrastructural elements that support it. Sectors like utilities, nuclear energy, copper and data centre REITs may not be in the AI spotlight – but they are quickly becoming essential players. These areas offer diverse and potentially resilient ways to invest in the AI megatrend beyond traditional tech stocks.
Grow your wealth nowSources:
DBS Insights Direct: Access the enablers of the AI economy: ETF in Focus
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