AI data centre boom hits the ASX, but the payoff is not what you’d expect
Corporate Australia is spending big on AI and the build-out is starting to ripple through the ASX — but not all stocks are set to benefit.
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KEY POINTS
- AI has become the largest spending theme in global markets, and the physical infrastructure it relies on has been expanding worldwide for years — with no signs of slowing.
- That wave has now reached Australia, where heavy investment in data centres is driving fresh demand across power, commodities like copper, and the banks that fund them.
- This piece unpacks why that extra demand fails to translate neatly into gains for the companies exposed to it, and why for one sector, it does the opposite.
Artificial intelligence is the biggest spending theme in global markets and the money is now landing in Australia. Billions are being poured into the datacentres, power, cabling and finance that AI runs on, and much of it is about to wash through the ASX. For investors, the question that matters is who benefits from the flood of money.
This data centre build-out is lifting demand across energy, banking and commodities. But stronger demand isn't cleanly translating into gains for any of them, and in one case, the effect may be negative. This article looks at why, and what it means for some of the ASX names positioned around the data centre growth theme.
The big AI spend – follow the money
Spending is surging with anything linked to AI, but there’s no clean way to measure the boom. UBS has used the Australian Bureau of Statistics (ABS) capex survey for the information, media and telecommunications (IMT) sector as a proxy. Capital expenditure in IMT has tripled year-on-year for the March quarter to $8.7 billion, which UBS thinks is almost entirely driven by AI.
UBS cautions the net impact on GDP growth is likely far smaller, because AI hardware carries very high import intensity. AI-related imports spiked to around $8.2 billion in the quarter, roughly double the $4 billion trend a year ago.
Data centres appear to be driving a parallel surge in construction. UBS links most of the jump in 'other commercial buildings' (OCB) work under construction to data centre projects. That figure reached around $21.6 billion in the March quarter, up about $15 billion year-on-year.
Building approvals for OCB are still climbing sharply, which UBS reads as a sign the construction peak is still ahead. It expects the OCB share of GDP could double to more than 1.5% over the next one to two years, with AI-related investment doing the same.
How data centres will affect the energy market
There's a wall of money going into AI infrastructure, and the flow doesn’t stop at the data centres themselves. Under a new mandatory framework aimed at ensuring that facilities don’t lift household power bills, regulators require operators to underwrite new renewable electricity generation, fund their share of network upgrades, and minimise water use.
The upshot of these requirements is that the extra investment by data centers in renewables and battery storage has driven wholesale power prices to multi-year lows. This could create major issues for power generation incumbents, like AGL Energy (AGL) and Origin Energy (ORG), warns Macquarie. Rather than helping replace coal-fired generation, the broker says the new renewable capacity could be absorbed by data centres, but not enough to force coal exits.
Those exits are what the market is banking on to tighten supply and lift prices. Origin's Eraring power station — one of the largest plants in the National Electricity Market — is now due to close in April 2029, a date pushed back several times, while EnergyAustralia's Yallourn power station is due in June 2028. Macquarie is sceptical about the closures landing on time.
For AGL, that means the price recovery it needs remains elusive, with Macquarie pushing its normalisation call out to FY31 from FY29. If data centres soak up the new renewable supply, NSW plants such as Eraring and Bayswater may run past their planned closure dates, keeping prices subdued. Macquarie rated AGL Underperform on July 10, cutting its price target to $7.75 from $8.83 against a last close of $8.28.
Can ASX banks cash in on data centre spending?
The data centre boom is also a potential major earnings driver for the banks. Macquarie estimates it could unlock $20 billion to $50 billion of major bank financing for data centres, with up to a further $10 billion tied to the power demand they create. The most bankable parts are the durable ones, such as data centre shells, powered land, grid connections and renewables, rather than the fast-depreciating GPUs, which are more likely to be funded through private credit.
The catch is how little of that reaches earnings. Macquarie sees only a 1-2% earnings-per-share uplift for the majors over the next decade, too small to offset slowing housing credit given mortgages make up 50-65% of bank balance sheets.
ANZ Group (ANZ) and Westpac Banking Corp. (WBC) are flagged as the larger beneficiaries, reflecting their bigger institutional franchises and existing involvement in project financing. Commonwealth Bank of Australia (CBA) is expected to see less, given its smaller institutional book, though Macquarie notes upside if it chooses to target the area. Though banks may significantly bankroll the AI boom, they are unlikely to be major beneficiaries.
Copper is set to be the big winner from AI
The AI build-out reaches into commodities too, and copper demand is set to soar given how power-hungry and cabling-intensive data centres are. In a recent note, UBS estimated that data centres and their power generation drew around 900kt of copper in 2025, growing at an 11% compound annual growth rate to about 1.55Mt by 2030.
The scale sounds large but represents only around 3% of current global demand, rising to about 4% by 2030. UBS frames this as one of several secular drivers powering copper’s strong demand fundamentals, such as EVs, renewables and grids, rather than a transformational step change. On that basis the bank stays structurally positive on the copper price, expecting demand growth to support elevated levels in the coming years.
Near term, UBS is more balanced on risk and reward, with copper exposed to renewed Middle East escalation or a further unwinding of the AI trade. Though physical signals remain firm as London Metal Exchange stocks moderate. The price now carries as much AI sentiment risk — should it unwind — as it does upside to physical scarcity.
Conclusion — ASX winners and losers
In terms of the numbers, the AI build-out is unmistakable, with IMT capex tripling year-on-year in the March quarter and data centre construction driving a sharp jump in commercial building work.
Yet the flow-through to the sectors that feed it is far from clean. In power generation, stronger demand is a negative for AGL and ORG since data centres may absorb the new renewable supply that was meant to push out coal, keeping prices weak. In banking, the lending opportunity is real but thin at the earnings line — too small to offset slowing housing credit. In copper, the demand is genuine but modest against the global picture, and much of the upside is likely already factored in.
The common thread is that brute scale of investment does not equal payoff. Sure, the spending in growing AI in Australia is large, concentrated, and still building. But for energy producers, banks, and the copper bull case, the benefit is either diluted, deferred or, in some cases, works against them. It is a reminder that investors must weigh the pros and cons of the AI spending boom rather than blindly jumping in.
