I Squared Capital sees the global infrastructure industry entering a supercycle, powered by “New Normal” factors such as sticky inflation, persistently high long-term interest rates, deglobalization and surging demand for inflation-resilient assets amid heightened stock market volatility.
Harsh Grawal, senior partner at I Squared, warns that inflation is no longer cyclical but structural. Fiscal stimulus measures implemented by the US and other developed countries despite widening budget deficits are fueling inflation, further intensified by US tariff hikes.
Amid the Trump administration’s immigration crackdown, “Demographics and populism mean deficits forever,” he said during a presentation at the global investment conference ASK 2025 hosted by The Korea Economic Daily on Oct. 30.
AI POWER DEMAND: NEW SUPERCHARGER
The US infrastructure investment firm expects artificial intelligence-led power demand to drive a new capital expenditure supercycle as global data center power demand is projected to double by 2030.
Annual global spending to build data centers is expected to exceed $170 billion by 2025, with a growing share allocated to high-density, AI-optimized infrastructure.
EQUIPMENT, CAPITAL SCARCITY
I Squared flags a growing mismatch between infrastructure demand and supply.
Lead times for critical components such as gas turbines and transformers have stretched to three to seven years from one to three years, reflecting severe supply bottlenecks due to a scarcity of equipment, construction and capital.
Private infrastructure fundraising has decreased notably since 2023, totaling $111 billion in 2024, down from $192 billion in 2021 and $194 billion in 2022.
However, governments around the world are intensifying their reindustrialization push to strengthen supply chains and facilitate energy transition strategies.
The firm highlights Germany’s plan to set up a debt-financed 500-billion-euro infrastructure fund. Canada is set to launch a $50 billion infrastructure fund.
I Squared’s investment strategy is centered on powering AI infrastructure, grid stabilization and clean energy.
Its portfolio spans AI inference data centers, battery storage, carbon capture and low-carbon infrastructure.
I Squared Capital sees infrastructure not just as a defensive asset class, but as the engine of the next wave of global growth.
“(We are) investing in the new normal,” the firm states, emphasizing hyper-diversification, alignment with national priorities, and a disciplined approach to avoid hype-driven risks.
