New research from MSCI shows that conventional power generation delivered returns of approximately 60% in the 12 months to June 2026, significantly outperforming both digital infrastructure and renewable energy, as surging electricity demand from AI reshapes global infrastructure markets.

The findings, published in MSCI’s new report, The State of Private Infrastructure: An Asset Class Coming of Age, suggest that the AI investment boom is increasingly rewarding reliable, dispatchable power generation over intermittent renewable energy.

Energy and related assets account for roughly half of infrastructure portfolios. Digital infrastructure’s share of the MSCI Global Quarterly Private Infrastructure Asset Index has risen from 3.6% a decade ago to just under 30% as of June 2026.

In the 12 months to June 2026, conventional power generation returned about 60%, contributing 3.8 percentage points to the index return on a 6% weight. Digital infrastructure returned about 11%, contributing 3.1 points on a 28% weight. Investors may need to assess data centre and power exposure together, MSCI suggests.

However, energy technologies have different return profiles. Renewable energy, including storage, returned 3.8% over the same period and was more volatile than conventional power generation and digital infrastructure. “The energy transition is not a uniform investment exposure,” said the report.

Moreover, headline infrastructure returns mask differences in asset performance. During the past 12 months to June 2026, the bottom quartile of assets returned zero in Apac and under 1% in the Americas and in EMEA. The top quartile returned 13% to 19%. “This highlights how large assets with unusual performance can disproportionately influence headline returns,” the report noted. 

Data centre returns also depend on ownership and business model. Infrastructure-held data centres are often platform-like, with development pipelines and revenue beyond rent. Real estate-held data centres are more commonly stabilized properties valued on lease income and residual land value.

Finally, physical climate risk can affect operations and revenues. The report finds that 89% of Apac data centre capacity sits in markets above the thresholds for chronic heat or drought stress compared to 54% globally. This presents an emerging valuation risk for investors and lenders if they aren’t pricing in heat and water stress.

The report also explores the wider implications of the AI infrastructure boom, including the risk that older data centres could become obsolete as increasingly sophisticated AI workloads demand more advanced power and cooling systems, potentially leaving investors facing significant refurbishment costs.