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Computing capacity, energy and datacentres are emerging as the new focus of AI investment as adoption accelerates globally.
In brief
- Global AI venture capital investment reached $430 billion in H1 2026, surpassing the full-year 2025 total of $254 billion.
- AI infrastructure capital expenditure is surging and projected to reach $2.9 trillion between 2025 and 2028.
- Ireland has the foundations to become a European AI hub, but infrastructure and planning remain critical challenges.
The AI investment story is changing.
Initially, attention has largely focused on venture capital investment in frontier model developers and AI start-ups. However, investment has become increasingly centred on the infrastructure that powers enterprise adoption, including compute, datacentres and energy systems.
AI investment has moved beyond being just a venture capital story to one that increasingly encompasses infrastructure, sovereignty and energy.
Capital is flowing at unprecedented speed into datacentres, semiconductors, networking, cloud capacity and electricity systems. Governments are treating AI capabilities as a strategic national asset. Sovereign wealth funds are investing directly in datacentres. On the other hand, energy infrastructure is becoming as important to AI development as access to advanced chips.
The defining question for the next decade may, therefore, be less about who develops the most capable AI models and more about who can finance and build the compute layer and infrastructure that sit beneath enterprise AI adoption.
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Chapter 1
Near exponential increase in investment continues
State-backed investors deployed $66 billion into AI and digitalisation in 2025, with investment on track to surpass $100 billion in 2026.
Global venture capital AI investment surged in the first half of 2026, with aggregate deal value of $430 billion already far exceeding the 2025 total of $254 billion.
Meanwhile, AI datacentre infrastructure expenditure is projected to reach $2.9 trillion between 2025 and 2028. This reflects a broader reallocation of capital across the AI value chain as the AI investment environment is maturing.
(Source: AL Capital Advisory, Press Articles, Secondary Research)
("E" means Expected / Forecast)
The EY Ireland AI Investment Key Deals and Market Insights study reveals that a growing share of investment is now directed towards the foundational technologies and assets that make AI deployment possible, from datacentres and advanced chips to cloud platforms and network infrastructure.
Forecasts of $1 trillion AI infrastructure spending once fuelled concerns about an AI bubble. Today, investment of three times that size appears far less extraordinary.
There is growing recognition that AI advancement depends on sustained infrastructure investment. Along with continued strong earnings performance by the leading tech companies, this probably explains the calm market response to the latest infrastructure investment forecasts.
Grit Young
EY-Parthenon Partner and EY Ireland Technology, Media & Entertainment and Telecommunications Industry Leader
New sources of capital
During 2025 alone, sovereign wealth funds (SWFs) deployed $66 billion into AI and digitalisation. These funds are underwriting major datacentre projects and supporting efforts to build domestic AI capability. Investment is expected to exceed $100 billion this year.
Capital availability is also being boosted by innovative new financing structures. For example, Blackstone recently launched its AI XPV Platform, a $35 billion structured financing model created in partnership with Broadcom and Apollo Global Management to fund high-end chips1.
Major VC deals in 2026
The largest AI transactions continued to centre on frontier model providers. OpenAI ($122 billion)2, Anthropic ($30 billion)3, and xAI ($20 billion)4 raised a combined $172 billion in the first quarter of 2026.
Other key deals included Sierra (US$950 million) valuing it at more than $15 billion5; Replit (US$400 million)6 and several European deals including Helsing (US$1.8 billion)7, Neura Robotics (US$1.4 billion)8, Advanced Machine Intelligence (US$1 billion)9 and Mistral (US$830 million)10.
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Chapter 2
The European sovereign AI agenda
The EU has introduced a coordinated AI agenda designed to build infrastructure, boost innovation and improve Europe's long-term AI competitiveness.
The increased focus on sovereign AI is particularly pronounced in Europe where the political backdrop for cross-border technology deals in cloud, IT infrastructure, and so on continues to shift. National authorities and regulators are increasingly prepared to intervene where technology assets touch on strategic interests, competitive sensitivities, or critical infrastructure.
The EU has adopted a set of interlocking initiatives: the AI Continent Action Plan11, Apply AI Strategy12, AI in Science Strategy13, Data Union Strategy14, AI Factories and Gigafactories15, InvestAI16, and the AI Omnibus17 simplification package. Together these form a coordinated effort to build European AI infrastructure and enhance Europe’s AI competitiveness.
This will see the development of 19 AI Factories, 13 Antennas and up to five AI Gigafactories supported by the €20 billion InvestAI facility. In addition, AI research funding will be increased with the Horizon Europe18 programme that aims to double annual AI investments to over €3 billion.
This pan-European approach is very welcome as catching up on the US and China on AI is beyond the capacity of any individual member state.
There are signs that these policies and instruments are beginning to pay off. Direct funding into European AI enterprises reached €21.3 billion in the first five months of 2026, surpassing the full-year 2025 total. As a result, AI companies now account for roughly 40% of all venture transactions across the continent.
Despite this progress, Europe’s AI ecosystem remains less penetrated and lags considerably behind the more mature US market and much more needs to be done if it is to catch-up in the short to medium term.
Grit Young
EY-Parthenon Partner and EY Ireland Technology, Media & Entertainment and Telecommunications Industry Leader
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Chapter 3
Ireland’s chance to capture the AI opportunity
Ireland’s strengths in talent, AI R&D, digital infrastructure and innovation provide a solid foundation for becoming a leading European AI hub.
The rapid growth in global AI investment presents a significant opportunity for Ireland but a number of infrastructure and planning challenges will need to be addressed.
Ireland is no longer a location of choice for datacentres. There was a de facto moratorium on new datacentre construction since 2021 due to the energy regulator putting a block on new grid connections for datacentres around Dublin. This was lifted in late 2025 with a policy change requiring operators to have on-site generation or battery systems capable of meeting their full electricity demand. Operators will also be required to provide power to the national grid when needed.
The country is also investing in its energy and water infrastructure through the €275 billion National Development Plan19.
A critical step towards addressing planning issues has been taken through the establishment of the Accelerating Infrastructure Taskforce aimed at speeding up the delivery of critical infrastructure projects including electricity grid and renewable generation developments.
Ireland also enjoys a number of considerable advantages as it seeks to establish itself as a European AI hub.
Ireland already has or is actively building many of the capabilities required to benefit from the continued growth in global AI investment. These include skilled talent, energy and digital infrastructure, a vibrant AI R&D sector, strong industry-academia collaboration, and a growing AI start-up community.
Grit Young
EY-Parthenon Partner and EY Ireland Technology, Media & Entertainment and Telecommunications Industry Leader
The country continues to attract tech investment because of its proven skills pool and the presence of giants like Google, Apple, Microsoft and Meta. OpenAI has just moved its European HQ to Ireland, for example.
Continued membership of the EU is another advantage. Understanding of, and familiarity with, EU data and AI regulations create opportunities for Ireland to host business functions dedicated to pan-European AI governance, compliance and risk management.
A welcome recent development is the Government’s increased funding for AI research and development. This includes increased support for Rinn Artificial Intelligence (Rinn AI), Ireland’s flagship national research centre for data science and AI, and the other State-backed AI research centre CeADAR. These centres will support the development of AI research talent and the next generation of AI start-ups.
State funding for AI and digital innovation is also increasing. Ireland Strategic Investment Fund’s (ISIF) commitments include €75 million to the Cordiant Digital Infrastructure Equity Fund, supporting the expansion of datacentres, communications towers and fibre networks, and €22.5 million to Molten Ventures Investments (Ireland) that backs early-stage, high-growth technology businesses.
ISIF has partnered with Elkstone to anchor an early-stage €100-million venture capital fund that will back Irish companies developing innovative, internationally scalable businesses, with a particular emphasis on AI and cybersecurity.
Key deals
Ireland’s AI industry continues to attract investment across a diverse range of sectors including fintech and quantum computing to healthcare, space technology and AI infrastructure.
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Chapter 4
An evolving risk environment
While AI investment continues to grow, risks including geopolitics, pricing pressures, stranded infrastructure assets and public trust could shape future growth.
While AI application and infrastructure investment are likely to continue growing, several risks could affect the market outlook. Most notably geopolitics.
Summary
AI investment is increasingly focused on the infrastructure that enables large-scale adoption, from compute and datacentres to energy and networking. Ireland is well positioned to benefit through its talent, research capabilities and technology base, although geopolitical tensions, rising costs and societal concerns remain key risks. Ultimately, success will depend less on building the most capable models and more on financing and deploying AI at scale.
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