Brookfield Sees AI Boom Creating Unexpected Winners Beyond Data Centers and Chipmakers

Artificial intelligence’s infrastructure boom is creating unexpected opportunities for investors, and Brookfield Asset Management Ltd (NYSE:BAM) is finding ways to capitalize on the trend in industries far removed from the technology sector.

From industrial equipment used to protect data center pipelines to the power and computing capacity needed to fuel AI adoption, the asset manager sees a growing ecosystem of businesses positioned to benefit from the technology’s expansion, Anuj Ranjan, president of Brookfield’s private equity business, said on Bain & Company’s Dry Powder podcast.

Ranjan said investors are underestimating the amount of electricity and infrastructure needed to support AI adoption, particularly as businesses and consumers increasingly use computing-intensive applications.

"The need for power is, I think, immense. That need for compute is immense," he said.

The opportunity also extends to businesses supplying the less obvious components of the AI infrastructure buildout.

Ranjan pointed to Chemilex, a Brookfield-owned business that makes heat-tracing equipment used to protect pipes and regulate temperatures across industrial facilities. The company has found a growing market in protecting data centers, creating a new source of demand that was not a meaningful opportunity just two years ago.

Private Equity Faces a Tough Fundraising Environment

Ranjan’s comments come as Brookfield navigates a challenging private equity fundraising environment, where institutional investors are becoming more selective about where they commit capital.

"Most clients of private equity have either slowed down or are pulling back from their private equity investments," Ranjan said.

One major obstacle is the lack of distributions returning to limited partners, leaving institutional investors with less capital to recycle into new private equity commitments. Strong public equity markets have also created competition for allocations, while higher interest rates and inflation have forced investors to reassess their private market portfolios.

Ranjan said the industry can no longer rely on economic growth or valuation multiple expansion to generate returns.

"Private equity has to roll up their sleeves and actually run businesses better to generate returns," he said.

That shift is benefiting firms with specialized industry knowledge and the operational capabilities to improve the companies they acquire. Investors are also consolidating their relationships with fewer private equity managers, favoring firms that can offer exposure across multiple asset classes and potentially better fee arrangements.

Industrials, Financial Infrastructure Among Top Opportunities

Looking ahead, Ranjan said the U.S. remains Brookfield’s most attractive market, citing its economic growth, scale and ability to embrace new technologies. The firm continues to invest in Europe, particularly in global businesses that operate across international markets, while approaching Asia more selectively.

Across those regions, Brookfield is focused on industrials, heavy-asset manufacturing and services businesses that provide essential products but remain under-digitized, creating opportunities for operational improvements.

Ranjan also identified financial infrastructure as an area with significant potential, particularly businesses that facilitate the movement of money around the world.

He pointed to stablecoins, central bank-backed digital currencies and other digital tokens as potential catalysts for transformation, with Brookfield more interested in the underlying payment systems than the digital assets themselves.

"You try to invest where you have differentiated knowledge, differentiated operating capability, and where you can take a long-term view in what is fundamentally a good quality business," Ranjan said.

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