The Surge in Technology Infrastructure Demand
When you hear about artificial intelligence in the headlines, chances are the story centers around software breakthroughs or chipmakers. But as an investor, you understand that behind every technological leap is a complex network of enablers: the infrastructure that allows innovation to scale.
In the case of AI, that enabling layer isn’t limited to power or real estate. It’s about something even more granular: the hardware systems that move data, keep systems cool, and allow models to operate at scale. Cooling, servers, switches, and cabling may not dominate news cycles, but they represent a critical opportunity for your clients and one that most AI-focused ETFs still overlook.
AI Doesn’t Work Without the Plumbing
Advanced models like ChatGPT and Gemini rely on rapid-fire communication between thousands of graphics processing units (GPUs) operating in parallel. These machines must be kept at optimal temperatures, connected with low-latency switches, and powered by dense, high-capacity infrastructure. Without those components, even the most sophisticated AI model stalls.
It’s this behind-the-scenes layer, what some call the plumbing of AI, that represents both a bottleneck and an investment opportunity. And it’s becoming a major driver of capital allocation for hyperscalers and infrastructure providers alike.
Cooling Is the Next Competitive Frontier
Thermal management used to be an afterthought in data centers. Not anymore. Today, the shift from central processing units (CPUs) to GPUs and tensor processing units (TPUs) means far more heat output per square foot. Traditional air-cooling systems are often inadequate for the power densities now required.
Enter liquid cooling. It’s rapidly becoming the gold standard for AI-scale data centers. Firms like Vertiv, which specialize in advanced thermal management systems, are now essential partners in hyperscale deployment projects.
Liquid immersion and direct-to-chip cooling are seeing accelerated adoption because they offer more efficient, compact, and scalable solutions. These systems not only enable the operation of dense compute clusters, but they also lower energy consumption, reduce floor space, and improve uptime. That’s a powerful combination for data center operators and a critical component of AI’s physical stack.
Switching, Servers, and Network Hardware
Beyond cooling, data must flow seamlessly between servers, often across enormous distances. This is where high-speed switching and networking hardware become indispensable.
Companies like Arista Networks are powering the connections that allow parallel model training, inference workloads, and distributed computing. These systems prioritize ultra-low latency and minimal packet loss, which is vital for the performance of large-scale AI systems.
Equally important are the custom server racks and back-end architectures that house these systems. They must be optimized not only for computing performance but also for power distribution and space efficiency. This convergence of IT (information technology) and OT (operational technology) is one of the defining investment narratives of the AI infrastructure era.
Cables and Power Distribution: The Overlooked Workhorses
It’s easy to ignore something as simple as cabling, but fiber optics, copper, and switchgear are the backbone of physical scalability. As power loads increase, the infrastructure that delivers that energy to server racks must evolve. And the companies that manufacture these components are quietly seeing demand spikes tied directly to hyperscale AI buildouts.
From a capital markets standpoint, many of these firms remain undervalued relative to their role in enabling AI. They don’t show up in traditional tech indexes. They aren’t household names. But they’re indispensable, and that’s what makes them so compelling for advisors looking to diversify AI allocations.
How Tortoise Capital Provides Exposure to These Hidden Enablers
Most AI ETFs are dominated by the usual suspects: mega-cap software and chip stocks. While those names play an important role, they don’t represent the whole picture. Tortoise Capital investment managers are going deeper, targeting the companies that power AI behind the scenes.
We focus on providing exposure to:
- Hardware providers that support thermal and power infrastructure
- Networking specialists enabling high-speed AI data transfer
- Manufacturers of cables, switchgear, and servers that complete the AI infrastructure stack
From cooling to networking, behind-the-scenes infrastructure is essential for AI growth. For an overview of these enablers, download The AI Revolution: Why Infrastructure is Critical to Ongoing Innovation.
For investors interested in strategies focused on this theme, Tortoise offers the AI Infrastructure ETF (TCAI). Explore the fund here.
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