.BlackRock Leans into the “Pick-and-Shovel” Strategy as AI Spending Remains Strong

The surge of capital flowing into artificial‑intelligence infrastructure is far from reaching its apex, according to Ben Powell, BlackRock’s chief investment strategist for APAC. He argues that the sector’s “picks‑and‑shovels” players—chipmakers, power generators, and copper‑wire manufacturers—are the most transparent beneficiaries as hyperscalers scramble to outspend each other.

“The capex deluge continues. The money is very, very clear,” Powell told CNBC on Monday. He added that BlackRock is concentrating on what he calls a “traditional picks‑and‑shovels capex super‑boom,” which he believes still has considerable upside.

AI‑related capital expenditures have become one of the year’s dominant investment themes, underpinning a broader market rally even as some analysts question the sustainability of the boom.

Nvidia’s GPUs, the workhorse of modern AI workloads, propelled the company to briefly breach a $5 trillion market‑cap, highlighting the ferocious pace of the AI‑driven rally.

Microsoft’s strategic partnership with OpenAI, formalized in October, is designed to fund the next generation of large language models. Industry chatter suggests OpenAI is preparing for an initial public offering that could command a valuation near $1 trillion.

The hardware build‑out is prompting multiyear procurement contracts across the tech supply chain, from high‑volume wafer agreements to long‑term power purchase agreements. Grid operators across the United States, Europe, and the Middle East are racing to accommodate the soaring electricity demand of new data‑center clusters. Companies such as Amazon and Meta have earmarked tens of billions of dollars annually for AI‑related spending.

According to S&P Global, global data‑center power demand could almost double by 2030, driven primarily by hyperscale operators, enterprise deployments, leased facilities, and, to a lesser extent, cryptocurrency mining.

Powell also highlighted that leading tech firms have only just begun to tap capital markets to finance the next wave of AI expansion, suggesting that additional funding pipelines are likely to open.

“The big companies have only just started dipping their toes into the credit markets… it feels like there’s a lot more they can do there,” he said.

He noted that hyperscalers are behaving as if a second‑place finish would effectively exclude them from the market, a mentality that is accelerating spending even at the risk of overshooting demand forecasts.

Much of the upcoming capital, Powell observed, is expected to gravitate toward the suppliers that enable AI—semiconductor fabs, renewable‑energy producers, and even copper‑wire manufacturers—rather than the model developers themselves. This view aligns with a growing consensus among global investors that the most durable gains from the AI boom may reside in the hardware, energy, and infrastructure ecosystems that underpin the technology.

“If we’re the recipients of that cash flow, that’s a pretty good place to be, whether you’re making chips, delivering power, or producing the copper wiring,” Powell concluded, forecasting “positive surprises” for those stocks over the coming year.