IShares tech ETF offers diversified route to AI infrastructure growth

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IShares tech ETF for AI growth

Highlights

Over 200 communities in 44 states have imposed data center restrictions, blocking or delaying about $130 billion in projects during Q1 2024.
Industry forecasts project capital expenditures to rise from $957 billion in 2024 to $1.5 trillion by 2027, with AI potentially boosting the global economy by 15% by 2035.
iShares Expanded Tech Sector ETF (IGM), holding over 290 companies, outperformed the S&P 500 with a 131% five-year gain versus 70%.

Data center backlash meets rising AI spending

As reported by Weiss Ratings, opposition to data center development is spreading even as demand for AI computing infrastructure continues to climb. The commentary points to Edgerton, Kansas, where residents are trying to block a proposed data center that city leaders support as an economic boost, after the city had sued residents before that case was dismissed.

The broader conflict is extending well beyond one community. The Urban Institute says more than 200 communities across 44 states have enacted restrictions temporarily halting new data center development, while opposition groups have helped block or delay projects representing about $130 billion in investment in the first three months of the year alone.

The political scrutiny is also reaching Washington. Republican Senator Josh Hawley and Democratic Senator Chris Murphy have backed legislation establishing liability for harms caused by AI agents, Republican Representative Tom Barrett has introduced a bill to create a Cabinet-level White House office for AI and other emerging technologies, and Democratic Senator Maria Cantwell has proposed a federal AI safety and testing framework.

Despite that pushback, forecasts in the piece still describe rapid growth ahead. Industry capital expenditure is projected at $1.5 trillion in 2027, up about 57% from $957 billion expected this year, while a 2025 PwC study says AI could make the global economy as much as 15% larger by 2035 and McKinsey estimates generative AI could eventually create $2.6 trillion to $4.4 trillion in annual economic value.

Diversified tech exposure seen as lower-risk play

The investment case presented favors diversified exposure to the technology sector rather than a direct bet on individual data center developers or single AI names. In that context, the iShares Expanded Tech Sector ETF, trading under the ticker IGM, is framed as a way to capture gains across the broader technology ecosystem while reducing exposure to headline-driven volatility.

The fund holds more than 290 companies, including large-cap technology groups such as Apple, Microsoft, Nvidia, Alphabet and Meta, alongside smaller companies in software, cloud, semiconductors and digital media. Examples cited include Arista Networks in high-speed networking, KLA in chip inspection and measurement systems, and Unity Software in real-time 3D development.

That diversification is presented as a buffer against political and project-level risks affecting parts of the AI supply chain. Over the past five years, the S&P 500 has gained about 70%, while IGM has risen 131%, according to the commentary, underscoring the argument that broad-based technology exposure may offer a steadier way to participate in the AI buildout.

In our earlier article on the U.S. AI data center boom, we examined how rising financing costs, construction delays, and power constraints are making it harder for developers to deliver projects on time and on budget. We also noted that only a minority of planned builds were viewed as truly feasible, with weakening investor confidence and growing local resistance adding further pressure on expansion plans.

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