Participate in artificial intelligence (AI) investing long enough and you’re apt to hear plenty about this disruptive technology’s substantial power demands. Market participants know the anecdotes. For instance, some data centers consume more power than states. Another one: Data centers in aggregate consume more power than nearly all of the world’s countries.
These interesting factoids highlight opportunity with ETFs such as the ALPS Electrification Infrastructure ETF (ELFY). The $200.6 million ELFY turned a year old in April. That’s still old enough to make it one of the pioneers in the AI electrification/power ETF realm. With each passing week, the good timing of this ETF becomes more clear.
Consider this data from a recent Gartner study. “Electricity consumption for data centers worldwide is projected to grow 26% in 2026,” noted the research firm. “Gartner forecasts global data center electricity consumption to reach 565 terawatt hours (TWh) in 2026, up from 447TWh in 2025.”
Translation: Data center operators and hyperscalers need the services and technologies purveyed by many ELFY member firms. That need is imminent.
Plenty of Tailwinds for ELFY
A plethora of reasons underscore the long-term case for ELFY. They include expectations that with each advancement in AI, power needs will increase. That’s playing out today, as generative AI evolves and as agentic AI gains momentum.
“Worldwide data center power demand is expected to rise 27% in 2026 and reach 132 gigawatts (GW), up from 104GW in 2025. It is estimated to attain 290GW by 2030, which reflects the unprecedented scale and pace of GenAI boosting demand,” noted Gartner.
Linglan Wang, director analyst at Gartner, points to some other potential catalysts for ELFY member firms.
“Infrastructure and operations (I&O) leaders must prioritize efficiency upgrades and secure grid access. They also need to invest in high-efficiency cooling systems and edge computing to mitigate power constraints and ensure sustainable, scalable growth,” Wang said in a report.
That’s potentially meaningful commentary for an ETF that allocates about two-thirds of its weight to industrial and utilities stocks. ELFY’s utilities exposure is also enticing, due to the power demands of AI-optimized servers.
“Gartner estimates AI-optimized server adoption will account for 31% of data center power consumption in 2026, and that by 2027 their power consumption will surpass that of conventional servers,” according to the research firm.
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VettaFi LLC (“VettaFi”) is the index administrator and calculation agent for ELFY, for which it receives a fee. However, ELFY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of ELFY.
