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Whilst we only seem to hear about AI stock price bubbles, Ben Rogoff, lead manager of the highly successful Polar Capital Technology Trust is more thoughtful. (By the way the fund is up +43.10% this year and 167.74% over five years.)* He admits that the sector is likely to remain volatile but is convinced that AI is driving one of the largest infrastructure investment programmes in history.

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Over the coming years, trillions of dollars will be invested in the data centres, power supplies and computer chips needed to support artificial intelligence. Until now, most of this investment was paid for directly by the large technology companies using the cash generated from their businesses. Increasingly, however, they are turning to borrowing and more complex financing structures to fund this spending – should we be worried? Ben Rogoff thinks not and sees this as a sensible way to fund assets that are expected to generate revenues for decades.

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The numbers involved are certainly eye-catching. Analysts estimate that as much as $5 trillion could eventually be invested in AI infrastructure. While this sounds daunting, the managers believe the real issue is not whether the money exists, but whether investors remain willing to provide it. So far, there is little evidence of a shortage of capital. Demand for debt issued by the strongest technology companies remains exceptionally strong, with recent bond issues attracting many times more investors than required.

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The bigger question is whether AI applications generate enough revenue to justify such enormous investment. Encouragingly, demand for AI computing power continues to grow rapidly. Leading AI developers, including OpenAI, Anthropic and xAI, are all planning significant expansions, while businesses are only just beginning to adopt AI on a meaningful scale. If AI usage continues to grow as expected, the revenues generated by this infrastructure should comfortably support the investment being made.

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That said, the managers at Polar Capital Technology Trust are keeping a close eye on one area of the market: private credit. Specialist lenders are expected to provide a significant proportion of the financing for AI infrastructure, but there are early signs that lending standards are becoming more selective. A handful of large projects have already struggled to secure financing on previous terms, and some private credit funds have experienced pressure in other areas of their portfolios. If investor appetite were to weaken materially, the pace of new data centre construction could slow.

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However, the managers believe this would be more likely to affect marginal projects than those backed by the world's largest technology companies. High-quality developments with strong commercial backing should continue to attract funding, even if financing conditions become more disciplined.

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Overall, the challenge seems to be one of timing rather than funding. Capital remains available, demand for AI continues to grow, and the long-term investment opportunity remains compelling. The key risk is not whether the money can be raised, but whether AI revenues continue to grow quickly enough to justify the unprecedented pace of investment.

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Perhaps the most encouraging point is that, despite enormous investor enthusiasm, AI adoption across the wider economy is still in its infancy. Although AI-related revenues have grown at an unprecedented pace, they remain a tiny proportion of global economic activity. Ben Rogoff and his team believe businesses are only just beginning to integrate AI into everyday operations, suggesting the investment opportunity could still have many years to run.

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As with any rapidly growing technology, periods of volatility are inevitable. The recent correction in July has removed much of the excessive optimism from the market while leaving the long-term investment case largely unchanged. If anything, the current weakness represents a pause within a powerful structural growth trend rather than the end of it.

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P.S. On bubbles and volatility, of which there is constant press coverage, not just on AI, but on the direction of the Iran War, which is impossible to predict, stock market corrections are just as likely to be triggered by something hiding in plain sight. One vulnerability may be the Japanese Yen carry trade. This is where investors have borrowed in Yen due to its very low interest rate and converted the currency into Dollars to buy bonds or equities and other higher yielding assets. This leveraged carry trade has been highly profitable whilst the Yen remained weak, but should it strengthen, the trade can quickly unwind as investors sell assets to buy back Yen to repay their loans which in turn can amplify market volatility. It is why the strategies at EXE Capital Management have a margin of safety built into them via diversification and adding managers who understand about paying for shares below their intrinsic value and who favour businesses with strong balance sheets, durable cash flows and resilient business models.  And of course, insisting that clients hold enough in cash to make them feel comfortable.

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*source: FE Analytics 10/08/2026

Comments from James Scott-Hopkins, Founder of EXE Capital Management.

The views are those of the author only.

The above does not constitute a recommendation to buy specific funds or assets. The value of investments can fall as well as rise. Past performance is no guarantee of future returns.‍

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