AMG National Trust explains how AI is evolving from a software story into an ecosystem story.

Artificial intelligence (AI) is often framed as “just” software, but as it expands, its success will increasingly depend on physical systems: energy, natural resources, and capital allocation. The question is no longer “Can we build it?” but “Can we power it?”

For investors, that shift may create opportunities well beyond the companies developing AI models and software.

Power: The Next Bottleneck

Scrutiny over AI’s seemingly insatiable power demands have gripped both the tech industry and environmental advocates. At the same time, construction of AI-related infrastructure and data centers is ongoing.

AI workloads can be intensive, requiring high-density power delivery and cooling systems capable of managing enormous amounts of heat generated by advanced processors. Unlike many commercial facilities, data centers cannot easily reduce consumption during peak periods or tolerate interruptions in service.

But 2026 is shaping up to be a year of dramatic change as breakthrough efficiency gains suggest these concerns may be short-lived.

The story begins with hardware innovation. The leap from Nvidia’s Blackwell chips to the newly unveiled Rubin generation could deliver up to a tenfold improvement in energy efficiency. This means fewer chips would be needed—four times fewer, in fact—to train AI models.

The transformation does not stop there. Analysts predict that by the end of 2026, a significant share of AI workloads may shift from data centers to edge devices—think smartphones and laptops—where smaller, specialized models process data locally. This architectural shift would not only boost computing efficiency but also relieve the burden on centralized data centers.

Grid optimization is also entering the spotlight. Static energy grids are being turned into dynamic systems that are designed to manage and optimize energy distribution in real time to prevent outages. Operators also are capturing excess heat from data centers and converting it for local heating needs.

Nuclear fission, used in some current power plants, is seeing a renaissance with facilities restarting in Japan, and new reactors being commissioned in China, India, and Korea. A potential game-changer could be nuclear fusion, generally viewed as more environmentally friendly but also as a technology that is not yet ready for prime time. However, fusion appears to be at a turning point with the real possibility that grid-scale power could be delivered in the early 2030s.

Natural Resources: Securing the Supply Chain

Every data center, transmission line, semiconductor fabrication facility, and energy storage system depends on raw materials.

Copper plays a critical role in electrification, grid expansion, and data center wiring. Lithium, nickel, and cobalt support battery systems that help balance power supply and demand. Rare earth elements are used in magnets and advanced electronics.

These materials are not always scarce but obtaining them reliably can be challenging, particularly when supplies are controlled by a competing tech economy. In addition, refining capacity is concentrated in relatively few regions and facilities, creating potential vulnerabilities.

For instance, China controls more than 90 percent of global production of gallium, used in high-performance chips. The U.S. Geological Survey estimates that just a 30 percent disruption in global supplies of gallium could damage U.S. economic output to the tune of about $600 billion.  

“Winning” may increasingly require control across the supply chain, from long-term contracts or ownership stakes in mining companies to geographic diversification that reduces geopolitical risk. To that end, after years of dormancy, the U.S. and its allies are now pouring billions into the critical-minerals industry.  

Capital: A Unique Convergence

Power provides the energy. Natural resources provide the materials. Every step forward, though, also requires significant investment. As a result, venture capital investors are becoming an increasingly important driver of AI’s next phase of growth.

Amid this environment, AMG sees a unique convergence where AI is influencing alternative investment opportunities across three dominant forces—real estate, energy, and venture capital.

Data center development is a real estate play; AI-driven power demand is an energy opportunity; and energy management and efficiency systems, battery storage technologies, and the development of fusion energy are areas being addressed by venture capital.

But also look at these three asset classes individually.

For instance, investment real estate (such as retail, industrial, and multi-family) has historically been a hedge against inflation. But data centers can represent a newer and increasingly important segment within the real estate space, as the build-out of AI infrastructure creates demand for land, setting up power and utilities, and executing on long-term commercial leases.

Energy royalties have benefited from the recent oil price spike, which is likely to subside if the ceasefire with Iran holds. But a long-term view acknowledges that this investment, in the past, has also generated strong yields in normal conditions.

Finally, venture capital focused on AI applications, data management, data security, and energy technology is positioned to benefit from the infrastructure already being built.

No Longer Simply a Software Story

AI will not be won by the smartest model. It will be won by the most complete system, that is, the system with access to reliable power, secure supply chains, scalable infrastructure, and the capital discipline to build for long horizons. In that sense, AI’s next winners may look less like software companies and more like modern industrial platforms.

For investors, anticipating opportunities requires a forward-looking, research-driven approach. That is why AMG focuses on helping clients prepare for whatever lies ahead. Ultimately, portfolios should be built around the future you are designing, whether that means growing a business, traveling the world, retiring with confidence, or advancing legacy and philanthropic goals.  

Learn more about AMG National Trust.