Henrietta Pacquement, Fixed Income Chief Operating Officer and Head of Sustainability, comments on data centres and AI infrastructure, natural gas and the race for rare earth materials.
Surging artificial intelligence (AI) workloads have driven billions of investment dollars into data infrastructure, lifting valuations across utilities, semiconductors, and power generation assets. Rapid advances in AI and the continued electrification of industries are pushing energy demand well above historical trends, attracting capital flows into both traditional and next-generation supply solutions.
Rising energy demand is reviving investment in natural gas, tightening liquified natural gas (LNG) supply chains, and widening spreads in European and Asian gas markets. Meanwhile, the scramble for rare earths is redirecting capital toward mining and critical-mineral plays, as geopolitical constraints in China and Africa are elevating supply-risk premiums.
Data centres and AI infrastructure:
By the end of 2026, global power demand from data centres is projected to rise 19% over 2025 levels, driven by explosive growth in AI, cloud computing, and digital infrastructure. This surge is reshaping global energy markets as data centres are one of the fastest-growing sources of electricity demand, led by the U.S., China, and Europe. Emerging markets are also stepping into the spotlight as hubs for new construction, partnering with Asian AI and cloud firms to meet the surge in processing capacity at lower operating costs.
The upside lies in sustained investment momentum across utilities, gas infrastructure, and grid capacity expansion, while the downside risks stem from energy price volatility, grid congestion, and slower permitting for new capacity. As the balance between digital growth and power supply tightens, data infrastructure is now a core investment frontier for 2026, linking energy reliability directly to technological competitiveness.
Global data centre electricity demand is projected to rise 74% between 2024 and 2026 and a further 70%+ by 2030 relative to 2026 output. Annual investment in data centre infrastructure build-out is expected to reach $1.3 trillion by the end of 2030, reflecting the accelerating convergence of AI, cloud computing, and digital infrastructure expansion. This rapid growth underpins the need for a broader range of financing options across equity, debt, and project finance markets.
We’re tracking the convergence of AI, power infrastructure, and the energy transition as a defining macroeconomic theme for 2026. That includes expanding portfolio exposures to listed utilities, grid enablers, and power equipment manufacturers poised to benefit from accelerating AI-related electricity demand.
On the credit side, we’re monitoring the uptick in leverage among major data centre operators such as Meta, Oracle, and Alphabet – which were among the largest issuers in global bond markets in 2025 and raised a record $75 billion in investment-grade debt to fund AI and digital infrastructure expansion.
While this represents a notable increase in borrowing, these companies currently are conservatively capitalised relative to sector norms, with leverage ratios still well below levels that would materially pressure credit quality. Nonetheless, the trend warrants close attention as balance sheets evolve alongside aggressive capital expenditure plans.
Natural gas
After three years of steep declines, natural gas has made a strong return as a cornerstone of global energy supply, driven by recovering industrial demand, the AI-led data centre boom, growing needs for grid stability, and falling prices – down roughly 65% in the U.S. and 80% in Europe from 2022 to 2024. With data centres now among the fastest-growing energy consumer, natural gas has reemerged as a practical and scalable transition fuel to meet near-term power needs while renewable capacity catches up.
Natural gas capacity for data centre usage is expected to increase 745% from 2025 to 2030, illustrating its role as the fastest-growing dispatchable power source in the AI era. This rapid expansion is already shaping how new capacity is built. Over 60% of new large-scale data centres built between 2025 and 2030 are expected to rely partially or fully on gas-fired power or grid-mix sources with significant gas input, highlighting the fuel’s critical role in bridging renewable intermittency and ensuring continuous compute uptime.
We are closely tracking how the resurgence of natural gas intersects with the AI infrastructure boom and energy transition. Through our proprietary Climate Transition Framework, we aim to identify the most resilient issuers and assets positioned to help deliver stable returns while aligning with global decarbonisation goals. Our focus is on structural drivers of gas demand, policy shifts, and credit conditions shaping investment opportunities across utilities, infrastructure, and transition-linked assets.
Rare earth materials
Acquisition of rare earths and critical minerals has become one of the defining undercurrents of the global AI and digital infrastructure boom. These materials are not only essential for hyperscale data centres but also critical for defence applications and national security. Their strategic importance has intensified bilateral partnerships such as the $8.5 billion U.S. – Australia agreements to co-invest in critical minerals and rare earth projects with the goal of reducing China’s dominance. According to the International Energy Agency (IEA), demand for rare earth elements is projected to rise by 35% from 2024 to 2030, adding further pressure on availability for sectors like energy, consumer discretionary, health care, and materials.
The structure of the rare earth supply chain poses significant challenges for the global economy. By 2030, China is projected to control roughly 70% of global rare earth mining, 85% of refining capacity, and more than 90% of magnet production. This effectively positions China as the world’s gatekeeper for materials critical to AI computing and grid-scale power electronics.
Since gaining a near-monopoly in rare earth materials, China introduced export controls in 2025 on select rare earth elements, tightening global supply chains for semiconductors, networking components, and advanced cooling systems critical to data centres. Investment in the critical mineral supply chain is expected to exceed $2 trillion by 2050, with mining alone requiring up to $800 billion of new capital.
Allspring is tracking how the race for rare earths is shaping industrial policy, supply chain resilience, and investment positioning across the AI and clean technology sectors. We are assessing how mineral dependence, geopolitical manoeuvres, and environmental risks influence issuer credit quality and long-term competitiveness. Our analysis focuses on producers, refiners, and diversified miners adapting to a market defined by scarcity, strategic stockpiling, and price volatility.
