OpenAI Data Center Plans Highlight AI Investment Momentum

Back in the tail end of September, OpenAI made headlines once more when CEO Sam Altman made public an internal memo that outlined his ambitions for the company to possess 250 gigawatts of data center power capacity by 2033. To put this into perspective, the Hoover Dam generates about 2 gigawatts of power at peak capacity, so OpenAI would need the equivalent of ~125 Hoover Dams to meet their 2033 electricity goal.

Great Expectations

It should not come as a particular surprise that Altman’s data center aspirations will require tremendous investments in the years to come. Brad Neuman, CFA, Senior Vice President and Director of Market Strategy at Alger, recently took a closer look at the numbers. According to Neuman, it could take about $12 trillion in investments to fund Altman’s gigawatt ambitions.

Naturally, advisors and investors might have some doubts about who’s footing the bill here. For Neuman, investment is going to come from a wide variety of different investors. As he noted, investors of all kinds have emerged to fund a variety of different AI projects across the globe.

“While there is financing needed, the dynamic of the AI build-out appears different than that of the dot-com era which was fueled largely by free-cash-flow-negative companies relying on the capital markets,” Neuman added. “Today, the companies driving AI—Microsoft, Google, Meta, Amazon—are among the strongest cash-generating enterprises in history. They have pristine balance sheets, positive free cash flow, and the ability to lever up if needed. That makes the sustainability of their investment cycles fundamentally different. The outside capital that is being raised is more diversified and is backed, in many cases, by long-term contracts.”

This blend of ambition and execution may potentially make the AI investment theme one of the more attractive tilts for a portfolio. Maintaining exposure to the companies who enable and profit from AI adoption can thus help advisors and investors capitalize on the enormous amounts of capital that OpenAI predicts it will need to expand its data center capacity.

ALAI Tackles AI Investing with a Fundamental Focus

The Alger AI Enablers & Adopters ETF (ALAI) may be well-positioned to meet the task. This fund invests in companies that are either enabling AI adoption or are embracing artificial intelligence to amplify business operations.

ALAI approaches portfolio construction through a focus on fundamental research. The fund’s portfolio team seeks out companies that the firm deems as undergoing Positive Dynamic Change. For Alger, companies seeing Positive Dynamic Change fall into one of two distinct categories: High Unit Volume Growth and Positive Lifecycle Change.

High Unit Volume Growth is similar to what an advisor would think of when considering a growth stock. Alger looks at High Unit Volume Growth companies as those who are seeing stronger market dominance or rising growth opportunities.

Meanwhile, Positive Lifecycle Change companies tend to benefit from more structural factors. Alger labels Positive Lifecycle Change Companies as those who are positioned well to benefit from new regulations, innovations, or even new management teams.

This blended, fundamental approach can subsequently help ALAI capitalize on a variety of different growth trends in the AI sector.

For more news, information, and strategy, visit the Artificial Intelligence Content Hub.

Click here for more information on the Alger AI Enablers & Adopters ETF.

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Disclosure Information

The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of November 2025. These views are subject to change at any time and may not represent the views of all portfolio management teams. They should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Holdings and sector allocations are subject to change. Past performance is not indicative of future performance.

Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Companies involved in, or exposed to, AI-related businesses may have limited product lines, markets, financial resources or personnel as they face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing their consumer base. These companies may be substantially exposed to the market and business risks of other industries or sectors, and may be adversely affected by negative developments impacting those companies, industries or sectors, as well as by loss or impairment of intellectual property rights or misappropriation of their technology. Companies that utilize AI could face reputational harm, competitive harm, and legal liability, and/or an adverse effect on business operations as content, analyses, or recommendations that AI applications produce may be deficient, inaccurate, biased, misleading or incomplete, may lead to errors, and may be used in negligent or criminal ways. AI technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the future growth.  AI companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. A significant portion of assets will be concentrated in securities in related industries, and may be similarly affected by adverse developments and price movements in such industries. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments.  Investing in companies of  small and medium capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Private placements are offerings of a company’s securities not registered with the SEC and not offered to the public, for which limited information may be available. Such investments are generally considered to be illiquid. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. ADRs and GDRs may be subject to  international trade, currency, political, regulatory and diplomatic risks. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

ETF shares are based on market price rather than net asset value (“NAV”), as a result, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund may also incur brokerage commissions, as well as the cost of the bid/ask spread, when purchase or selling ETF shares. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, periods of high volatility and disruption in the creation and/or redemption process of the Fund. Any of these factors, among others, may lead to the Fund’s shares trading at a premium or discount to NAV. Thus, you may pay more (or less) than NAV when you buy shares of the Fund in the secondary market, and you may receive less (or more) than NAV when you sell those shares in the secondary market. The Manager cannot predict whether shares will trade above (premium), below (discount) or at NAV.

The Fund may effect its creations and redemptions for cash, rather than for in-kind securities. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the Fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in Fund shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind. Brokerage fees and taxes will be higher than if the Fund sold and redeemed shares in-kind. Certain shareholders, including other funds advised by the Manager or an affiliate of the Manager, may from time to time own a substantial amount of the shares of the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund.

Alger pays compensation to VettaFi to sell various strategies to prospective investors.

The following positions represent firm wide assets under management as of August 30, 2025: Microsoft Corporation: 8.98%; Alphabet Inc.: 2.55% Meta Platforms Inc: 5.43%; Amazon.com, Inc.: 5.68%

Before investing, carefully consider a Fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for a Fund’s most recent month-end performance data, visit  www.alger.com, call (800) 992-3863 (for a mutual fund) or (800) 223-3810 (for an ETF), or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing. Distributor: Fred Alger & Company, LLC. All underlying series of The Alger ETF Trust listed on NYSE Arca, Inc. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.

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