The change in US government commitment to mitigating climate change is slowing impact investors’ interest in energy transition infrastructure in favour of artificial intelligence (AI) projects.
A research report from Phenix Capital, a Dutch impact investment adviser, reveals that while global Investment in the energy transition exceeded USD2 trillion for the first time in 2024, growth has hit its slowest pace for three years.
The study, which looks at how infrastructure investment is aligned with meeting the UN Sustainable Development Goals (SDGs), reveals a burgeoning trend to towards AI infrastructure, for example in hardware, software and data management.
Phenix says: “Last year’s infrastructure report focused on how investors were hoping to benefit from then incumbent US President Joe Biden’s championing of clean energy for tech projects. In less than one year, however, the Oval Office’s focus has done an about turn with President Trump expected to prioritise fossil fuel production under his “drill, baby, drill” policy, potentially seeing a demise in renewable energy subsidies.”
The study notes: “The focus seems to be shifting to AI infrastructure as the race to own the AI space heats up.”
According to the UN Deputy Secretary General, Amina Mohammed, AI is “already optimising energy use, improving medical diagnostics, monitoring biodiversity, expanding educational opportunities – and so much more”.
And McKinsey estimates that generative AI could add the equivalent of USD2.6 trillion to USD4.4 trillion annually in value to the global economy.
Phenix notes that the global AI infrastructure market – already valued at USD60.23 billion in 2025 – is forecast to grow at a CAGR of 26.60 per cent between now and 2034 to reach USD499.33 billion
“From power plants, and transmission lines to data centres, this new ‘investment category’ that sits somewhere between artificial intelligence and infrastructure looks set to attract billions from some of the world’s largest investors.”
However, AI infrastructure is still dwarfed by clean energy commitments, which Phenix says is essential if the world is to meet its green transition targets.
According to OECD, World Bank and UN Environment analysis, an annual investment of USD6.9 trillion in infrastructure will be necessary by 2030 to ensure infrastructure investment is compatible with the SDGs and the Paris Agreement.
Phenix says this explains why 87.5 per cent of the infrastructure funds focus on Affordable & Clean Energy (SDG7), and further 22 per cent on Climate Action (SDG13). Industry, Innovation & Infrastructure (SDG9) funds make up nearly 23 per cent of the preferred strategies.
At USD818 billion, China has invested most and drove the majority of the growth in 2024, eclipsing the US’s USD338 billion, USD381 billion from the EU, and USD65.3 billion from the UK.
