AI’s Boom Has Infrastructure Investors Looking at Garbage

The investing frenzy in data centers that the AI boom sparked has created a bargain-hunting opportunity—in everything but AI assets.

AI has pulled investors’ attention away from unglamorous assets in sectors like transportation and waste management over the past few years, as they have poured billions into data centers and related AI infrastructure. Now investors are getting excited about boring-sounding assets that can throw off cash, like landfills or rail terminals.

And while mega-investments have become the norm in building massive AI data centers, investors argue that far smaller but still essential plays like regional airports can offer attractive returns.

“The intense focus on digital infrastructure means that you increasingly have high-quality mature assets in other more traditional parts of the infrastructure ecosystem, whether that's in utilities, transport, social infrastructure and so on, which are receiving less of the spotlight,” said Nicholas Pepper, a managing director at the infrastructure business of Partners Group, an asset manager with $186 billion in AUM at midyear. “This is creating opportunities to acquire these assets at attractive valuations.”

The sheer scale of the capital needed for the AI buildout has pulled unprecedented sums into the infrastructure investing market.Blackstone, for instance, has made AI a major theme across its businesses, including infrastructure, credit, private equity and real estate. And in a landmark deal announced last October, a group of investors, including BlackRock’s Global Infrastructure Partners, acquired Aligned Data Centers at an enterprise value of around $40 billion, the largest such sale at the time.

Partners Group, for its part, which closed its fourth infrastructure-dedicated fund at over $15 billion in July, has itself been among the investors piling into data center infrastructure. Its deals include an initial $1 billion investment in AVK Power Solutions, a power provider for data centers in Europe, announced in August.

But there are growing signs that investors across AI-related assets have grown more selective amid construction delays, rising financing costs and regulatory blowback that could slow the AI buildout or hurt its eventual payoff. Those pressures are showing up in delayed data center developer IPOs and ballooning financing costs, but could also stall the predictable cash flows that make infrastructure investments attractive in the first place.

Meanwhile, though investors’ attention has been on AI, the prospects for more traditional infrastructure generally haven’t suffered too much. That’s a contrast to other asset classes, where areas such as software fell out of favor because investors feared a direct hit to their business from AI.

Infrastructure investors say they’re embracing traditional assets in transportation and logistics, aviation, waste and water infrastructure, bridge and road maintenance and gas processing, among other sectors, along with the stable cash yields and contracted or regulated revenues that typically come along with them.

And investors more focused on middle-market deals argue they’re particularly well positioned because the biggest infrastructure investors have gravitated toward the AI sector, leaving smaller transactions with less competition.

“U.S. mega cap investors’ minimum check sizes have gotten so big that they won't come down and participate in this segment of the market, so it has created a huge economic moat for us,” said Brett Stevenson, a founder and managing partner at Canadian private equity and infrastructure investment firm BTG Capital.

While BTG has sold several power facilities to data centers, benefiting from the boom in some ways, most of its investments have been focused on transportation and logistics, as well as energy and utility assets that weren’t a data center play. For instance, the firm in June acquired the then-closed Stephenville International Airport with plans to restore and modernize the Newfoundland-based airport’s infrastructure, and reopened it on Oct. 2. Assets like airports are in a “very scarce asset class, and obviously scarcity can drive potential multiple arbitrage in the future,” Stevenson said.

Larger investment firms have also been active in less glamorous corners of infrastructure. Morgan Stanley Infrastructure Partners, which has made a number of data center investments, is zeroing in on the waste management sector due to the stability offered by its long-term municipal contracts, low exposure to commodity risk and geopolitical tensions and growth opportunities in regions looking to reduce landfill reliance, said a person familiar with the matter.

U.S. waste management companies in particular command a premium and are currently trading at a valuation of around 15 times Ebitda versus 10 times Ebitda for European companies, the person said. U.S. companies tend to control more of the waste process, integrating everything from garbage pickup to treatment facilities and landfills where it winds up.

Meanwhile, the broader transportation sector also offers more cyclical infrastructure bets that could be poised for an upswing. That includes in the freight and U.S. trucking sectors, which had been grappling with overcapacity following a pandemic-era boom, as well as higher fuel and other operating costs.

The sector is also grappling with geopolitical tensions, which can disrupt shipping routes, pushing valuations down across the broader transportation and logistics sector. That all means a potentially attractive entry point for infrastructure investors, which often compete with strategic buyers for certain assets like ports and rail terminals. The median Ebitda multiple for strategic deals in the broader transportation and logistics space dropped to 5 times in the first quarter of this year from 12.7 times in 2025, according to a report from middle-market investment bank R.L. Hulett.