Expanding power needs driven by the ongoing growth in AI, alongside other structural shifts such as electrification, will continue to create investment opportunities in the infrastructure and utilities sectors, and even further growth in energy transition investment, according to a new report released by the BlackRock Investment Institute.

The report forecasts that the power demand for AI will continue to grow even with the emergence of more efficient AI models, such as the recently introduced DeepSeek, anticipating instead that significant investment will be required to enable “new frontiers,” such as “artificial general intelligence that matches or surpasses human abilities.”

According to the report, even after the DeepSeek news hit the market, major technology players announced plans to significantly grow AI spend, with current company guidance indicating that “Meta, Amazon, Microsoft and Alphabet are expected to invest nearly $320 billion in AI capex this year, up roughly 40% from 2024.”

With the growth in AI, alongside other factors such as rising global incomes, industrial growth and electrification of buildings and vehicles, driving rising power demand, BlackRock forecasts that “already huge investment expected in the energy transition could grow further, in our view,” particularly as “the companies driving the AI buildout prefer power supplies that are always on, cost-effective, immediately available and low carbon, a difficult combination,” which could drive demand for natural gas and renewables.

While the report sees a continued role for traditional energy as policymakers address needs for affordable and reliable power, BlackRock adds that “longer term, demand could rise for nuclear and other low-carbon, available-when-needed energy sources.”

Click here to access the report.