Investors Shift From AI Hype To Infrastructure As “Nuts And Bolts”

Thursday 29th January 2026

By inAfrika Newsroom

AI infrastructure returns is the focus for private equity and long-term investors as attention moves from headline applications to the physical build-out—data centres, power supply, cooling, chips and networks—that determines where profits will be captured, a Reuters analysis reported on Wednesday.

The argument is straightforward: artificial intelligence adoption is accelerating, but the largest, most defensible returns may be earned by firms that control bottleneck infrastructure rather than those competing in crowded software layers.

For African markets, the shift matters because the continent’s opportunity set is increasingly tied to enabling infrastructure. AI tools depend on reliable electricity, fibre networks, cloud access, and data governance rules that allow secure use across sectors such as banking, agriculture, health and public administration. Where those foundations are weak, adoption is limited, and value is extracted elsewhere.

Several African countries have made digital transformation central to development plans, but investors remain cautious where grid stability is poor or where data rules are unclear. That increases the premium on projects that bundle energy reliability with digital capacity, such as industrial parks with embedded power solutions or regional data centre clusters linked to subsea cables.

The Reuters piece frames AI as an investment theme that will be expressed through “nuts and bolts” spending. In African terms, that can translate into a race to build bankable, regulated digital infrastructure that attracts global cloud providers, regional telecom capital, and domestic institutional investors seeking long-duration assets.

There is also a policy dimension. Governments that set predictable rules on cross-border data flows, cybersecurity standards and competition can help local firms capture more value. Without that, AI-related spending can deepen import dependence—hardware, cloud services and licensing—while local firms remain consumers rather than producers.

For public-sector leaders and DFIs, the more practical question is sequencing. AI strategies that prioritise skills without infrastructure can disappoint. Conversely, building infrastructure without demand creation can produce underutilised assets. The investment case is strongest where policy and projects are aligned: energy reliability, last-mile connectivity, and a clear pipeline of users in government and business.

Next steps

AI infrastructure returns will be shaped by capital allocation decisions in data centres and networks, and by policy choices on energy planning, digital regulation and cross-border connectivity that determine whether Africa becomes a serious hosting market or remains an end-user zone.

Why it matters

AI-driven growth will not be evenly distributed. Countries and firms that control infrastructure bottlenecks can capture durable returns, while those without reliable power and connectivity risk being priced out of the next productivity wave.