Artificial intelligence might grab headlines for disrupting software and productivity, but the real-world buildout is happening in concrete, cables, switchboards, and server racks.
As hyperscalers expand data centres and governments invest in electrification and transport upgrades, billions of dollars are flowing into the physical backbone that powers AI. For investors, that opens the door to companies that build and wire the infrastructure rather than design the software.
Here are three ASX-listed ideas exposed to that trend.
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Southern Cross Electrical Engineering
Southern Cross Electrical Engineering Ltd (ASX: SXE) is an electrical, instrumentation, and communications services provider with exposure to infrastructure, resources, energy, and increasingly, data centres.
In December, the company announced it had secured approximately $90 million in new contracts across data centres and rail. That included works at DigiCo Infrastructure REIT (ASX: DGT)'s SYD1 data centre project in Sydney's inner west, where the facility is being expanded with additional levels and increased power capacity.
The company's subsidiary, Heyday, was awarded design and construct works for low-voltage switchboards, busways, generators, UPS systems, and general power systems. On the rail side, Southern Cross secured electrical and communications works linked to Sydney Metro's St Marys Station Project.
As data centres scale up to handle AI workloads and transport infrastructure modernises, companies like Southern Cross are directly involved in delivering the power and systems that make it all work.
SKS Technologies
SKS Technologies Group Ltd (ASX: SKS) is another contractor positioned at the heart of the digital infrastructure buildout.
The company provides structured cabling, audiovisual, electrical, and communication solutions, with a growing footprint in data centres. While it is smaller than some industrial peers, its exposure to mission-critical infrastructure projects makes it a leveraged play on data centre expansion.
As AI models become more complex, demand for high-performance computing infrastructure continues to rise. That means more server rooms, more connectivity, and more integrated systems. Contractors like SKS sit at the implementation layer, helping deliver the physical networks and environments that support these facilities.
Rather than betting on which AI platform dominates, SKS offers exposure to the broader theme: more data, more processing power, and more infrastructure to house it.
Global AI Infrastructure ETF
For investors seeking diversified exposure, the Global X AI Infrastructure ETF (ASX: AINF) provides a different angle.
The ETF is designed to track companies globally that build and enable AI infrastructure. That can include data centre operators, semiconductor manufacturers, networking hardware providers, and power and cooling specialists.
Instead of selecting individual stocks, AINF spreads exposure across the ecosystem supporting AI's growth. That may help reduce single-company risk while still capturing the broader structural theme.
As global investment in AI infrastructure accelerates, including new data centres and upgrades to energy and grid capacity, the ETF offers a way to participate in that buildout through a single ASX-listed vehicle.
The Foolish big picture
AI and electrification are not overnight stories. They are multi-year, potentially multi-decade shifts that require vast physical infrastructure.
While software companies may capture much of the attention, the engineering firms installing switchboards and cabling, and the global suppliers of servers and semiconductors, are integral to the process.
Of course, project-based businesses can face margin pressure and cyclical swings, and thematic ETFs can be volatile. Still, as capital continues flowing into data centres and grid upgrades, investors may keep a close eye on who is being paid to build the backbone of the AI age.
