Artificial intelligence is reshaping every corner of the global economy — but the technology’s expansion depends on something far more tangible than algorithms: electricity, steel, and cooling systems. The Defiance AI Power & Infrastructure ETF (AIPO) was designed to capture this reality. As of January 31, 2026, AIPO has delivered a 22.69% total return (NAV) since its July 2025 inception, including an 11.07% year-to-date gain. The fund’s 59 holdings span the full physical supply chain behind AI, from electrical equipment manufacturers and nuclear energy companies to grid builders and data center operators.
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The scale of the energy challenge facing the AI industry is difficult to overstate. According to the International Energy Agency, global data center electricity consumption reached approximately 415 terawatt-hours in 2024 — roughly 1% of all electricity generated worldwide. The IEA has estimated that figure could more than double to 945 TWh by 2030, growing at roughly 15% annually, or four times faster than electricity demand from every other sector combined.
The spending to meet this demand has been unprecedented. According to CreditSights, the five largest hyperscalers — Amazon (AMZN), Microsoft (MSFT), Google (GOOGL), Meta (META), and Oracle (ORCL) — collectively spent an estimated $443 billion on capital expenditure in 2025, with Amazon alone guiding for roughly $200 billion in 2026 capex directed primarily at AWS and AI infrastructure. Microsoft’s fiscal 2026 capex guidance exceeded $140 billion. Meta guided $115–$135 billion and announced a $50 billion “Hyperion” data center in Louisiana. All five companies have reported being supply-constrained rather than demand-constrained — meaning the bottleneck has not been customer demand for AI services, but whether there is enough physical infrastructure to deliver them.
This supply-demand mismatch is a critical dynamic for investors evaluating the AI infrastructure theme. JLL’s year-end 2025 data center report documented a 35-gigawatt construction pipeline in North America, with more than 10 projects exceeding 1 GW each. Data center vacancy sat at a record-low 1% nationally, and 92% of pipeline capacity was already pre-committed to tenants.
Inside AIPO: A Picks-and-Shovels Approach to the AI Buildout
AIPO tracks the MarketVector US Listed AI & Power Infrastructure Index (MVAIPO), which requires constituent companies to derive at least 50% of their revenue from critical electrical grid and AI infrastructure. The result is a portfolio that looks very different from a typical technology fund. Industrials account for 54.6% of fund assets, followed by utilities at 18.0%, technology at 16.8%, and energy at 6.8%. The fund is weighted toward the companies physically building, wiring, and powering the AI buildout rather than the software running on top of it.
Three of AIPO’s top holdings illustrate this infrastructure-first thesis. GE Vernova ($GEV), one of the fund’s largest positions, is a grid equipment and power generation company that reported record orders in Q4 2025 — up 65% year-over-year — and held a $150 billion backlog driven by electrification and data center demand. Vertiv Holdings ($VRT) is a pure-play provider of data center thermal management and power delivery systems. Vertiv guided for 27–29% organic revenue growth in 2026 and carried a Strong Buy consensus from 14 of 15 covering analysts. Vistra Corp ($VST), a power generation company, commanded a unanimous Strong Buy rating from all 10 covering analysts. Vistra signed a 20-year power purchase agreement with Meta in January 2026 for 2,609 MW of nuclear-generated electricity.
The Nuclear Renaissance and the Race for Firm Power
One of the most distinctive elements of the AI infrastructure story — and one that sets AIPO apart from conventional technology funds — is the revival of nuclear energy. AI workloads require carbon-free baseload power that runs around the clock, and nuclear is one of the few proven sources that fits that description at scale. U.S. technology companies have signed contracts for more than 10 GW of potential new nuclear capacity over the past year.
Constellation Energy (CEG) is working to restart Three Mile Island Unit 1 under a $1.6 billion, 20-year power purchase agreement with Microsoft, with a targeted 2027 date supported by a $1 billion DOE loan. Holtec International is pursuing what would be the first-ever restart of a decommissioned U.S. nuclear plant at Palisades in Michigan, backed by a $1.52 billion DOE loan guarantee. Google has signed a fleet deal with Kairos Power for 500 MW of small modular reactors, and Amazon backed a $500 million investment in X-energy for four SMRs. Executive orders signed in May 2025 called for 300 GW of new U.S. nuclear capacity and directed the NRC to streamline the regulatory process.
Risks Investors Should Weigh
Stretched valuations: AI-linked utility and infrastructure stocks have traded at significant premiums to historical averages. As of early 2026, Vistra’s trailing price-to-earnings ratio sat at roughly 51–61 times, well above the utilities sector average of approximately 19.6 times. Any disappointment in data center demand or a shift in AI spending sentiment could lead to significant multiple compression.
Grid interconnection bottlenecks: Average wait times in the PJM regional grid have stretched to more than eight years, with over 2.6 TW of generation and storage capacity in the national interconnection queue. While this has benefited infrastructure builders by creating sustained demand, it could also slow the pace of data center deployment and delay revenue growth for power producers.
Nuclear technology risk: No commercial-scale small modular reactor currently operates in the United States, and NuScale (SMR) cancelled its first U.S. SMR project in 2023. Traditional nuclear projects carry a long history of cost overruns and schedule delays. AIPO holds approximately 10% of assets in nuclear-exposed names, making technology execution risk non-trivial.
AI capex concentration: The AI infrastructure boom has been highly concentrated among roughly five hyperscalers, which have accounted for the vast majority of spending. Only about 25% of enterprise AI initiatives have delivered their expected return on investment to date, and AI-related services have generated approximately $25 billion in revenue against hundreds of billions in annual infrastructure spending — a gap that warrants monitoring.
Short track record and thematic concentration: AIPO launched in July 2025 and has not yet been tested through a full market cycle. Its 0.69% Gross expense ratio is higher than broad-market index funds, and its concentrated exposure to AI-driven infrastructure spending means it could underperform if capital expenditure growth decelerates. Power transformer lead times have averaged 128 weeks with prices up 77% since 2019, and 25 data center projects were cancelled in 2025 due to local community opposition — reminders that the buildout faces practical constraints.
The Bottom Line
The AI infrastructure buildout has emerged as one of the largest capital investment cycles in modern history, with hyperscaler spending having reached hundreds of billions of dollars annually and data center power demand growing at multiples of the broader electricity market. AIPO offers investors one approach to accessing this theme through a diversified portfolio of 59 companies spanning the full power supply chain — from uranium miners and nuclear operators to electrical equipment manufacturers, grid builders, and data center operators.
However, investors considering AIPO should weigh the fund’s elevated sector valuations, its limited operating history, and the concentration risk inherent in a theme driven by a small number of hyperscaler customers. Depending on an investor’s risk tolerance and time horizon, a thematic infrastructure allocation may complement broader portfolio exposure — but it is not a substitute for diversification across asset classes and sectors. Past performance is not indicative of future results. Investors should consider their own financial situation, investment objectives, and risk tolerance before investing.
Disclosures
This article is sponsored content created in partnership with Defiance ETFs. It is intended for informational and educational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities.
The Fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus and summary prospectus contain this and other important information about the investment company. Please read the prospectus and/or summary prospectus carefully before investing. Hard copies can be requested by calling 833.333.9383.
Defiance ETFs LLC is the ETF sponsor. The Fund’s investment adviser is Tidal Investments, LLC (“Tidal” or the “Adviser”).
About the Index: The MarketVector™ US Listed AI & Power Infrastructure Index tracks U.S.-listed companies deriving at least 50% of their revenue from artificial intelligence hardware, data centers, power infrastructure, or related sectors. The index is designed to capture the growth of industries driving AI adoption and modern energy systems. Constituents are weighted by free-float market capitalization and rebalanced quarterly, with index values disseminated on an end-of-day basis.
Investing involves risk. Principal loss is possible. As an ETF, the fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. A portfolio concentrated in a single industry or country may be subject to a higher degree of risk.
Market Risk: The Fund’s investments may decline in value due to general market conditions, economic events, or factors affecting specific industries or issuers. Index Tracking Risk: The Fund may not perfectly replicate the performance of the Index due to fees, expenses, and other operational factors. Sector Concentration Risk: Because the Fund may invest heavily in technology, utilities, and energy sectors, it is more vulnerable to adverse developments in these areas. AI and Technology Risk: Companies involved in AI hardware and data centers are subject to rapid innovation cycles, competitive pressures, and regulatory challenges. Energy and Infrastructure Risk: Power generation and utility companies can be adversely affected by regulatory changes, commodity price fluctuations, supply and demand imbalances, and environmental considerations.
Performance Disclosure: The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling 833.333.9383. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns.
For standardized performance current to the most recent month-end, visit defianceetfs.com/aipo or call 833.333.9383.
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