AI-Conscious Asset Allocation: Portfolio Construction in a Capital Investment Boom

J.P. Morgan Asset Management

Research

42 Pages

J.P. Morgan Asset Management explores how investors can build portfolios around the AI capital investment boom, drawing lessons from railroads, telephone networks and fiber optics. The paper projects $5.5 trillion of AI capex by decade end and argues that AI exposure now runs through equities, credit, infrastructure and real estate, which may weaken traditional diversification assumptions.

Key Takeaways

Debt Funds the Build: Investment grade bonds are expected to supply $2.1 trillion of AI capex through 2030, more than double hyperscaler cash flow at $1.0 trillion.
Three Capex Paths: U.S. AI capex could peak near $1.2 trillion in the baseline, stay above $1 trillion with sustained demand or fall to about $500 billion.
Rethink Diversification: Core open end real estate funds hold under 0.5% data center exposure, offering a defensive counterweight as AI correlation spreads across asset classes.
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