AI picks and shovels – 2 funds for exposure to the AI infrastructure build out

The artificial intelligence (AI) boom has created some of the world's most valuable companies, names like Nvidia, TSMC and Microsoft. But, as with many historical gold rushes, some of the biggest opportunities might not lie with the miners, but with those selling the picks and shovels.

Behind the rapid growth of these companies sits a vast ecosystem of companies supplying everything from data centre infrastructure and power supply to cooling technology and networking solutions.

While many of these companies are smaller and less familiar, they have become important beneficiaries of the growing AI demand.

Over the last 12-months the North American smaller companies index has returned 27.1% while the S&P 500 has returned just 17.6%. Much of the smaller companies performance can be related to the build out of AI, with several companies performing exceptionally well.

Why have smaller companies benefited?

The recent growth in AI has been accompanied by significant capital expenditure from some of the world's largest technology companies. Firms like Microsoft, Amazon, Alphabet and Meta have committed hundreds of billions of dollars towards expanding their AI capabilities, investing heavily in data centres, computing infrastructure and networking equipment.

And who is on the other side of much of this spending? Smaller companies. They’re further down the supply chain and are often the businesses that build, supply and service the infrastructure needed for AI.

As a result, many have enjoyed rising demand, improving earnings and strong share price performance. Their fortunes remain closely tied to this spending, and should the large technology companies cut back then future demand might be hit.

But early signs are suggesting this is unlikely at this point. Many believe we’re still in the early adoption phase of AI where the spending could continue for some time. For example, in 2026 Meta are expected to spend as much as $145bn, much of it on AI, up from the $72bn they spent in 2025. This could provide a good runway for future growth.

Where are the opportunities?

The most high profile opportunities are in datacentres.

Datacentres sit at the heart of the AI ecosystem, providing the computing power needed to run the AI models. The construction and expansion of these facilities create demand for a wide range of products and services.

Some less obvious opportunities lie in areas like power and connectivity, which are also becoming increasingly important.

AI workloads consume significant amounts of electricity and require vast quantities of data to be transferred quickly and reliably. This has created big bottlenecks in power management, grid infrastructure and networking technology – creating opportunities for the companies in those sectors.

The potential for ‘off the beaten track’ winners is one reason we prefer active fund managers in the smaller companies space. They are best placed to understand the risks and rewards of investing in these types of companies.

Two funds for exposure to the AI infrastructure build out

Investing in these funds won’t be right for everyone, especially as investing in smaller companies can increase risk. Investors should invest only if a fund matches their objectives, they understand its risks and charges, and it forms part of a diversified portfolio.

For more detail on each fund, its charges and specific risks, please see their factsheets and key investor information.