The AI craze is everywhere, but BlackRock says most investors are looking in the wrong place. While everyone else is chasing flashy AI models, the real profits are quietly piling up behind the scenes.
Ben Powell, BlackRock’s chief investment strategist for APAC, warns that hyperscalers’ race to secure chips, power, and materials is just beginning. According to him, the companies supplying the “picks and shovels” of AI—the essential hardware and infrastructure—are positioned for steady, long-term gains.
In short: the gold rush is on, but the miners aren’t making the money.
Hyperscalers Are Driving an AI Spending Frenzy
The Race for Compute Power
Tech giants like Google, Microsoft, Amazon, and Meta are spending aggressively to outpace each other. They’re building data centers, buying GPUs, securing electricity, and investing billions in AI infrastructure.
Powell says this spending surge is far from peaking. Companies are borrowing heavily to fund the race, signaling that the AI arms race is only accelerating.
Capex Deluge
The wave of capital expenditure on AI infrastructure is massive. Unlike AI models that can be hit or miss, infrastructure spending is predictable and essential. That makes the suppliers powering the AI boom some of the most reliable beneficiaries of this trillion-dollar trend.
The “Picks and Shovels” of AI
Lessons From History
Just like in the gold rush, the companies selling the tools make steady profits. Powell believes AI follows the same rule: the hardware and infrastructure providers are the safest bets, not the AI startups themselves.
Who Wins Big
According to Powell, the clear winners are:
- Chipmakers and semiconductor equipment providers
- Data center construction and maintenance firms
- Power and energy companies
- Copper and other raw material manufacturers
- Cooling and thermal management technology companies
These firms benefit from every AI expansion, every hyperscaler upgrade, and every new data center built worldwide.
