The global infrastructure theme appears to be at a pivotal inflection point, fueled by both urgency and innovation. The rapid integration of disruptive technologies, such as generative AI, autonomous and electric vehicles (EVs), renewable energy, and defense tech, are creating generational tailwinds for infrastructure development. At the same time, developed economies face structural challenges from aging assets and rising extreme weather risks that require urgent, large-scale overhauls to infrastructure networks. In key emerging markets like India, infrastructure development remains tightly linked to economic growth, with sustained budgetary support for roads, rail, bridges, and power infrastructure, among other assets. In total, it is estimated that nearly half of the buildings that will need to exist worldwide by 2050 have not yet been built.1
Given these dynamics, we believe global infrastructure is emerging as one of the most resilient and investable themes of this decade. The Global X Infrastructure Development ex-U.S. ETF (IPAV) offers investors an opportunity to capture secular growth across the infrastructure development value chain, and across key international economies witnessing accelerated investment. Below, we highlight some of the trends and markets that driving global infrastructure development.
Key Takeaways
- Infrastructure development opportunities appear to be gaining pace globally, due to the convergence of several powerful tailwinds, including the adoption of disruptive technologies, aging infrastructure assets, and shifting demographics.
- In the European Union, increased government support for defense and domestic manufacturing, as well as rising infrastructure needs from aging assets, could unlock trillions of dollars in infrastructure spending over the coming years.2
- In emerging economies like India, trillions of dollars in infrastructure investment may be essential to sustain long-term economic growth, while South Korea could be among the countries to benefit from the ongoing data center boom.3
1. Global Infrastructure Is at a Turning Point, Boosted by Powerful Structural Tailwinds
The world’s economies are rapidly transforming, and infrastructure sits at the core of nearly every major structural shift. First, disruptive technologies such as generative AI, nuclear power, electric vehicles, and renewable energy are on their way to becoming more widely adopted. 71% of organizations surveyed by McKinsey used Gen AI as of June 2024, up from 33% in 2023, causing a construction boom in data centers around the world.4,5 EVs’ share of the passenger vehicle market reached 20% in 2024, and the segment’s share is forecast to increase to more than 60% by 2035.6 Significant investment into infrastructure assets will likely be needed to support the expected growth rates for these technologies. For example, it is estimated that $6.7 trillion will be spent on data centers alone worldwide by 2030 to keep up with growing AI demand.7
Notably, many power grids will need to be able to service added power demand from data centers and EVs at a time when many grids are aging and face increasingly limited transmission & distribution (T&D) capacity. Power grids are also rapidly transforming due to the energy transition towards higher shares of solar power, energy storage, nuclear power, and wind power. The International Energy Agency (IEA) estimates that 80 million kilometers (nearly 50 million miles) of power lines will need to be added or replaced worldwide by 2040 to support these shifting demand and supply dynamics.8
Climate change is shifting the severity and frequency of extreme weather events, creating the need for both rebuilding infrastructure in hard-hit areas and for retrofitting assets to lower risks. There were roughly 151 unprecedented extreme weather events in 2024, including floods, landslides, and hurricanes that destroyed buildings and power infrastructure in countries like Italy, Brazil, and Japan.9 Another major shift underway globally is an increased focus on friendshoring manufacturing and restructuring supply chains due to rising global fragmentation. Production is moving out of regions like China, other parts of Asia, and Europe, driving demand for the construction of new factories, warehouses, distribution, and research and development (R&D) centers. Similarly, rising geopolitical tensions are boosting infrastructure development for military and defense applications, along with weapons production facilities.
2. Europe’s Growing Focus on Defense and Reindustrialization Could Boost Infrastructure Spending
Growing policy efforts to strengthen the EU’s infrastructure networks, domestic manufacturing, power production, and defense capabilities could create sustained opportunities for infrastructure developers in the region over the coming years. Most notably, in March 2025, German lawmakers approved plans for a spending surge on defense and infrastructure.10 In particular, the legislation creates a €500 billion fund (~$554 billion) towards Germany’s infrastructure development over the next 12 years, including railways, roads, rural infrastructure, power and grid infrastructure, among other assets.11 Also in March, Sweden’s Prime Minister announced plans to increase defense spending to 3.5% of GDP by 2030. This would equate to about 300 billion SEK ($30.5 billion) and could spur spending for industrialization and supportive infrastructure.12 Prior to this announcement, Sweden’s government had been discussing plans to ease its tight budget spending rules in order to increase investments into defense and infrastructure.13
Many of Europe’s infrastructure assets are old and in need of significant repair or replacement, which is also central to the increasing focus on infrastructure investment. For example, Germany’s train network often faces extensive delays due to decades of underinvestment. Just 31% of long-distance trains in the country arrive with a delay of less than a minute.14 In July of 2024, the EU allocated nearly €7 billion (~$8.17 billion) to 134 transport projects under the Connecting Europe Facility (CEF).15
Furthermore, Europe’s energy grid is one of the oldest in the world, with the average age of grid assets at 40 years old.16 Shifting demand and supply dynamics and rising risks from extreme weather and cyber attacks could heighten the potential for disruptions. Europe’s electricity industry association has said that the blackouts experienced in Spain and Portugal in April 2025 were a wake-up call, and that “the need to modernize and reinforce Europe’s electricity grid is urgent and unavoidable.”17 In total, the European Commission estimates that Europe needs to invest up to $2.3 trillion into power grids by 2050.18 In France alone, the country’s grid operator estimates that €100 billion ($113.5 billion) is needed for grid infrastructure enhancements and expansion through 2040.19
At the regional level, in early 2025, the European Commission released the Clean Industrial Deal (CID), a strategy that aims to boost the EU’s industrial competitiveness while accelerating decarbonization efforts, including renewable energy and grid developments.20 The CID aims to mobilize over €100 billion (~$116.8 billion) in investments towards bolstering clean manufacturing in the region, as well as €1.5 billion (~$1.75 billion) in support of strengthening European supply chains of grid components.21 In our view, infrastructure developers could benefit if the strategy results in faster permitting procedures and leads to additional investments into manufacturing and power grids.
3. India’s Growing Infrastructure Needs Are Leading to New Development Opportunities
Expanding infrastructure is fundamental to the development goals of leading emerging markets, including India. The country is forecast to experience robust demand growth for infrastructure and related materials as its economy continues to develop. Notably, India is projected to become the world’s third-largest economy by as early as 2028, with Gross Domestic Product (GDP) forecast to grow from $3.5 trillion in 2023 to $5.7 trillion in 2028.22 By 2030, the country’s GDP could surpass $7.3 trillion.23 However, much of the projected economic growth is reliant on continued infrastructure development. It is estimated that $2.22 trillion will need to be invested into India’s infrastructure development to enable GDP to reach $7 trillion by the end of the decade.24
The growing development opportunities span a variety of infrastructure segments. For example, airport passenger traffic is forecast to rise 10% year over year (y-o-y) in Fiscal Year 2025 and 7% to 9% y-o-y in FY2026, to reach as many as 450 million passengers annually. Given capacity bottlenecks and strong growth outlooks, India’s airports may require an estimated $11.5 billion in investments over the next four-five years.25 To support a buildout of new power capacity and an increasing share of renewable energy, the Federal Government estimates that $107 billion will need to be invested through 2032 in transmission lines.26
India’s government appears set to continue supporting infrastructure development. For FY2025 (ended in March 2025), India’s Federal Government allocated an estimated 3.4% of GDP (INR 11.11 lakh crore, ~$130.8B) to infrastructure.27The Union Budget 2025 that was proposed in February of this year introduced key reforms to further bolster infrastructure spending, with the federal infrastructure budget increased to INR11.21 lakh crore (~$132B).28
4. Global Data Center Buildout Set to Attract Nearly $7 Trillion in Investment by 203029
Private investments are also likely to drive infrastructure development opportunities globally, and one of the most immediate and powerful catalysts for infrastructure spending is the rapid buildout of data centers to support generative AI demand growth. Policymakers increasingly view AI infrastructure as essential to economic competitiveness, digital sovereignty, and long-term productivity gains, meaning that asset buildout has become a strategic national priority in many countries.
Significant capital investments have been announced in key regions, including across Europe and Asia. Among the countries and regions with notable investments:
- South Korea: Over the first half of 2025, there have been several announcements of companies looking to build new data centers in the country. In June, it was reported that one of South Korea’s leading real estate firms, Koramco Asset Management, is planning to invest 10 trillion won (~$7 billion) on data centers by 2032.30 Additionally, there are reports that both OpenAI and Alibaba Cloud are considering building new data centers in the Asia-Pacific region, including in South Korea.31,32
- Japan: Softbank, a major investor in OpenAI, is planning to build a 150 megawatts (MW) data center facility in Japan that could serve as a key backbone for Japan’s AI infrastructure assets.33 KDDI Corporation, in partnership with Nvidia and Sharp is also planning what could be Asia’s largest data center in Japan as well.
- Europe: In April 2025, Microsoft announced new commitments towards expanding its AI infrastructure in Europe. The company plans to increase European data center capacity by 40% in the next two years via projects across 16 European countries.34 For example, in June of this year, Microsoft announced plans to invest $400 million to grow its Data Center footprint in Sweden.35
- India: In April 2025, it was reported that the Indian conglomerate Adani Group is planning to invest an additional $10 billion on the buildout of data centers in India.36 The company has reportedly identified possible sites for up to two data centers of 1GW each, and the plan is to scale to 10GW over time. The $10 billion investment plans follow nearly $6 billion towards data center infrastructure that was announced last year.37
These data centers will not only require sizeable resources and materials during the construction phase, but they will also require significant power resources to operate. This could lead to increased demand for power and grid infrastructure in the country, particularly given that many of these projects are slated to be far from city centers due to limited land availability.
5. IPAV Seeks to Capitalize on Infrastructure Development Across Developed and Emerging Markets
The Global X Infrastructure Development ex-U.S. ETF (IPAV) seeks to invest in stocks that potentially stand to benefit from infrastructure development in international markets, including emerging and developed markets but excluding the United States.
We believe that IPAV is well-positioned to capture the rising investment for infrastructure development around the world. Key fund methodology highlights include:
- Targeted Sub-Segments: The fund focuses on companies in five sub-themes - Engineering and Construction Services; Raw and Composite Materials; Construction Equipment and Products; Infrastructure Transportation; and Smart Grid Components. These sub-themes deliver a combination of companies across the entire infrastructure development value chain.
- High Thematic Purity: Companies must derive at least 50% of their revenues from one or more of the five core sub-segments. This high threshold targets companies primarily focused on the development of infrastructure assets.
- Unconstrained Approach: IPAV seeks to capture infrastructure development trends by investing in companies outside of the U.S. that are part of the infrastructure theme, regardless of sector or industry classification. In addition, the fund seeks to cast a wide net for capturing international infrastructure development companies, so its only geographic limitation is that it excludes companies listed or domiciled in the U.S., Bangladesh, China (A-Shares and B-Shares), Kuwait, Pakistan, Russia, Egypt, and Saudi Arabia.
Conclusion: EU and Emerging Markets Infrastructure Acceleration Illustrate IPAV’s Potential
Global infrastructure development is essential to support the adoption of disruptive technologies such as AI, the reindustrialization and reshoring of supply chains, and to sustaining long-term economic growth in emerging markets. Against this backdrop, we believe the world is entering the early stages of a potential infrastructure super-cycle—one that spans continents and benefits a wide spectrum of companies across the infrastructure development value chain. In our view, IPAV offers targeted exposure to this global and generational buildout, capturing opportunities across companies that are driving and enabling this transformation.
Related ETFs
IPAV – Global X Infrastructure Development ex-U.S. ETF
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