AI infrastructure will drive an “unprecedented surge” in project financing, research from corporate services firm CSC has found.

In its research, CSC surveyed 200 project finance professionals in order to assess the increasing demands of AI data centers and the $1.5 trillion gap in financing.

It found that a majority (70 percent) believe infrastructure is the strongest area for future growth, driven by the surging power consumption caused by data centers supporting AI and rapid digitalization.

This was followed by renewables (48 percent) and technology, media, and telecommunications (43 percent). Both of these are also largely being driven by AI data center growth.

Nearly 40 percent of respondents expected the most growth in Europe, followed by the UK with 35 percent.

Respondents were less sure of Asia Pacific and North America, however, with 32 percent and 31 percent of respondents, respectively, selecting those regions.

CSC said this reflects a “broadly diversified global investment pipeline.”

“AI will likely drive an unprecedented surge in project financing, particularly for data centers and associated infrastructure,” said Christian Oakley-White, managing director and head of Project Finance at CSC. “As data center usage shifts from cloud services to generative AI, the requirements for computing power, energy, and financing will grow exponentially.

“Unlike cloud infrastructure, which was largely funded through Big Tech’s internal cashflows, the estimated $1.5 trillion gap created by AI’s capacity demands will require a far broader investor base and financing structures – from private equity and sovereign wealth funds to bank loans, public debt markets, and private credit.”

According to CSC, these finance sources are beginning to diversify with more than half of respondents (53 percent) citing private equity as the primary source of equity funding, alongside infrastructure funds and development finance institutions. Some 38 percent told CSC that private credit was an “increasingly important contributor.”

The corporate services firm also noted that the accelerated activity is “bringing heightened execution pressures,” with Know Your Customer requirements identified by 80 percent of respondents as the biggest challenge.

“The global demand for new energy, infrastructure, and digital capacity is outpacing traditional financing channels,” said Bryan Gartenberg, managing director, global sales head of Project Finance and Loan Agency, CSC. “Private capital is stepping in to bridge the gap, but today’s deals demand more than funding alone.”

“Stakeholders need partners with deep expertise and operational discipline to manage complex, cross-border transactions. Outsourcing to experienced trust and agency providers is becoming essential to deliver large-scale projects with speed and confidence.”

Funding gap

The AI infrastructure funding gap has been a major source of debate over the past few months, as fears of an AI bubble deepen.

Analysis by JPMorgan Chase & Co. said that more than $5 trillion is set to be spent on global data center and AI infrastructure over the next five years. The bank said meeting these investment promises will “likely require participation from every public capital market as well as private credit, alternative capital providers, and even government involvement.”

But there is still some skepticism over whether there will be any sort of return on such record investment, or if developers and operators will even be able to afford interest repayments.

Last week, IBM’s CEO said that there was “no way” AI companies and data center developers will get a return on their investments as interest repayments on such significant investments would be too high.