The surge of investment in data centers sparked by the AI boom has created a wave of opportunities, but the real gains may not lie in AI-related assets.

Over the past few years, massive amounts of capital have poured into data centers and AI-supporting infrastructure, drawing investors' attention away from unglamorous sectors such as transportation and waste management.

Now, assets that sound mundane but generate steady cash flows 鈥?landfills and rail freight hubs, for example 鈥?are reigniting investor interest.

While spending heavily to build large-scale AI data centers has become standard practice in the industry, investors believe that smaller yet still essential assets like regional airports can also deliver considerable returns.

"The market is intensely focused on digital infrastructure, which has led to a decline in attention toward a large number of high-quality, mature assets in traditional sectors such as utilities, transportation, and social infrastructure," said Nicholas Pepper, managing director of infrastructure at asset management firm Partners Group.

The firm had $186 billion in assets under management as of mid-year.

"This gives us the opportunity to acquire such assets at quite attractive valuations."

The AI construction wave requires enormous amounts of capital, and vast sums are flooding into the infrastructure investment market as a result.

Blackstone, for instance, has made major bets in the AI space, spanning infrastructure, credit, private equity, and real estate.

In October of last year, a consortium led by BlackRock's Global Infrastructure Partners completed a landmark deal to acquire Aligned Data Centers, which was the largest data center sale at the time.

Partners Group closed its fourth dedicated infrastructure fund in July of this year with more than $15 billion raised, and is itself one of the investors in data center infrastructure.

In August, the group announced an initial investment of $1 billion in AVK Power Solutions, a European data center power services provider.

But mounting signs suggest that investors in AI-related assets are becoming more cautious, due to construction delays, rising financing costs, and regulatory hurdles.

These risks could slow the pace of AI buildouts or hurt the final returns of projects.

Such pressures are already visible in delayed IPOs by data center developers, looser terms on infrastructure debt, and stalled AI construction projects 鈥?and could even undermine the most fundamental appeal of infrastructure investing: predictable, stable cash flows.

Meanwhile, despite capital being concentrated on AI, the overall outlook for traditional infrastructure sectors has not been severely damaged.

This stands in contrast to other asset classes: the software industry, for instance, has fallen out of favor with investors due to concerns that AI will directly disrupt its business.

Infrastructure investors say they are bullish on traditional areas such as transportation and logistics, aviation, waste and water infrastructure, road and bridge maintenance, and natural gas processing.

These types of assets tend to have stable cash income, with revenue coming from long-term contracts or regulated pricing.

Investors focused on mid-sized deals believe they have an excellent window: as large infrastructure institutions crowd into the AI space, competition for small and mid-sized asset transactions has weakened.

"The minimum investment threshold for giant U.S. asset managers has been raised very high, and they won't participate in this segment, which creates a strong economic moat for us," said Brett Stevenson, founder and managing partner of BTG Capital, a Canadian private equity and infrastructure investment firm.

BTG Capital has sold several power facilities to data centers, taking a share of the AI boom, but the bulk of its investments remain focused on logistics and transportation, as well as energy and utility assets unrelated to data centers.

For example, in June the company acquired the then-defunct Stephenville International Airport, with plans to renovate and upgrade the facility in Newfoundland, and it completed the reopening on October 2.

Stevenson said airports are a "very scarce asset class, and that scarcity is expected to create valuation arbitrage opportunities in the future."

Large investment institutions have also begun to position themselves in these overlooked infrastructure sectors.

People familiar with the matter said Morgan Stanley Infrastructure Partners, despite having made multiple data center investments, is now turning its attention to the waste management industry.

The waste management sector has long-term municipal contracts, low exposure to commodity and geopolitical conflict risks, and growth potential as localities reduce their reliance on landfills.

The people said U.S. waste management companies generally enjoy valuation premiums, currently trading at around 15 times EBITDA, compared with just 10 times for their European peers.

Most U.S. companies control the entire waste management chain, from garbage collection and processing facilities to final landfills.

The broader transportation sector also contains infrastructure targets that are cyclical and poised for recovery.

After the pandemic boom, freight and the U.S. road trucking industry have been plagued by overcapacity and rising fuel and operating costs.

Geopolitical conflicts have also hit the sector, disrupting shipping routes and dragging down valuations across the logistics and transportation segment.

For infrastructure investors who need to compete with industrial buyers for assets such as ports and rail hubs, this means an attractive entry point.

A report published by mid-sized investment bank R.L. Hulett shows that in the first quarter of this year, the median EBITDA valuation for industrial M&A transactions in the logistics and transportation industry fell from 12.7 times in 2025 to 5 times.