What happens when AI infrastructure gets harder to build?

AI infrastructure constraints and a less supportive rate backdrop are shifting the opportunity toward companies with scarce power, data-centre capacity and computing access, while requiring more selective portfolio positioning.

• Semiconductor shares fell almost 9% between 2 and 6 November after the US midterms, while clean-energy shares gained around 4% and gold rose more than 2%.
• Greater scrutiny of data-centre permits and power use could delay projects, while companies with existing access to infrastructure may gain bargaining power.
• The team reduced its emerging-market overweight to neutral after returns became increasingly dependent on a small group of Asian technology companies.
• US employment rose by 165,000 in October, unemployment fell to 4.1%, euro-area inflation increased from 3.8% to 4.0%, and core inflation stayed at 2.5%.
• These figures give the Federal Reserve less reason to cut rates soon, while upcoming results from CoreWeave, Cisco and Applied Materials should test AI infrastructure demand and corporate spending plans.

Takeaway: The long-term AI view remains positive, but investors should favour high-quality companies with access to scarce infrastructure and account for weaker support from falling interest rates.