Much of the infrastructure that fits in traditional categories has been built on mature, often fossil-fuel-based systems and incorporates relatively little integrated digital technology. That definition is rapidly changing and expanding. Modern infrastructure increasingly has the following characteristics: Tech-enabled. Digital platforms, sensors, and AI enable capabilities such as real-time monitoring (for example, IoT-powered water management), predictive maintenance (AI-supported rail system diagnostics), and advanced network optimization (smart traffic systems). Market-driven. Infrastructure is increasingly shaped by private capital flows, user demand, and competitive forces. For example, AI demand is driving accelerated data center development and private investment. Decentralized and modular. Nimble networks of smaller, self-contained units are faster to deploy, easier to upgrade, and more resilient to disruption than legacy infrastructure. For example, segments of the energy sector are moving from centralized power plants to a modular model where multiple smaller power sources (such as microgrids that generate solar and offer battery storage and backup power) are aggregated by a centrally managed platform, or “virtual power plant.” Operating-expense oriented and service based. A growing share of value can be captured through models such as asset-as-a-service offerings (where the customer pays for uptime or output rather than buying or leasing an asset), which often include bundled maintenance services, as well as stand-alone third-party operations and maintenance contracts. Both models are increasingly enabled by monitoring technologies and aim to deliver superior uptime and efficiency over the long term. Built on scaling and disruptive technologies. Infrastructure may be designed with the goal of limiting life cycle emissions, incorporating energy-efficient systems and circular-economy practices. This expanded definition of infrastructure manifests in seven main infrastructure verticals, many of which blend physical assets, new technologies, and ongoing services. Infrastructure systems are more interconnected than ever, so when governments, investors, and private-sector operators plan investment strategies, they are learning to shift their mindsets to “cross-vertical” thinking. It’s not enough to take a compartmentalized approach. Electric-vehicle corridors, for example, require coordination among power utilities (energy), highway authorities (transportation), and payment platforms for charging stations (digital). Other verticals are blending as well. As data center clusters expand to facilitate AI, they draw heavily on the grid for power and water for cooling, bringing together digital, energy, and water infrastructure. Waste, agriculture, and energy are increasingly interconnected now that farm waste such as livestock manure and food scraps can be converted into renewable natural gas to feed electricity back to the grid and power on-site equipment. These overlaps are sparking new business models that pull together different types of infrastructure to create more flexible, resilient ways to deliver infrastructure services. In fact, in many cases, full value from assets in different verticals can be realized only when they operate as an integrated whole. Lagging development among the assets of a single vertical can create bottlenecks across the system. Insufficient electricity production, for example, hampers the construction of data centers. This interconnectedness—and interdependence—is prompting investors to target cross-vertical opportunities at increasing levels. From the second half of 2023 through the first half of 2024, cross-vertical strategies attracted 75 percent of the infrastructure capital raised. New infrastructure’s $106 trillion opportunity. According to McKinsey estimates, addressing the global need for new and improved infrastructure will require roughly $106 trillion in investment across the seven main verticals by 2040. This substantial figure reflects the scale of unmet demand across the world: many countries are grappling with aging roads, congested ports, and strained public transit systems while trying to decarbonize freight, aviation, and passenger mobility. Energy ranks second at $23 trillion, driven by the global push to expand clean generation, upgrade aging grids, and meet electrification demand from industries and end users. Digital infrastructure is estimated to require $19 trillion of investment. While this figure is lower than that needed for several other verticals, digital’s role as a catalyst for them means it will see the most growth from today’s level of investment. Fiber, towers, satellites, and data centers form the backbone of business, cities, digital services, and AI-powered systems across all other verticals. Agriculture and waste and water, while smaller in dollar terms ($5 trillion and $6 trillion, respectively), are essential for food security, resource conservation, emissions reduction, and, increasingly, supplying clean fuels and circular inputs to other verticals. Projected investment varies considerably by region, with Asia alone accounting for more than two-thirds at $70 trillion. This substantial majority reflects Asia’s rapid urbanization, population growth, and continued industrial expansion. Much of this capital will go to transportation, energy, and digital connectivity to support rising demand in megacities and industrial zones. We project the Americas will attract approximately $16 trillion in investment, split between three opportunities. One is modernizing legacy infrastructure, such as transportation systems. A second is expanding new digital infrastructure, including data center growth. The third involves scaling infrastructure in fast-growing Latin American cities such as Lima and Medellín. Europe is expected to follow, with roughly $13 trillion in investment. Much of this will focus on renewal of aging infrastructure—from roads, bridges, and railways built decades ago to the upgrading of digital networks. Europe tends to have the world’s most ambitious climate targets; meeting them will require considerable renewable-energy projects and grid modernization. Clearly, the infrastructure moment has arrived—and with it, tremendous opportunity. The fastest-growing category is digital infrastructure, which has jumped to about 16 percent of global deal value as hyperscalers scramble for towers, fiber, and edge data center capacity. Renewables now account for roughly one-quarter of all transactions, cementing their place as a mainstream infrastructure allocation rather than a niche climate play. Traditional transport has shrunk from roughly 45 percent of deal value a decade ago to approximately 22 percent in 2024, while power and core energy hover in the low teens. Investment across verticals—for example, at the nexus of energy and digital in the construction of data center campuses—has risen as well, due to increasing interdependencies. However, private investors face challenges. Higher interest rates (which increase discount rates and compress returns), crowded auction processes, longer exit timelines, and evolving geopolitical dynamics are reshaping infrastructure valuations, fundraising momentum, and portfolio-level return expectations. Cross-border deals have been affected by evolving geopolitical relations and tightening investment controls in critical infrastructure verticals. To ensure they capture the required returns for their limited partners, investors are experimenting with fresh ways to unlock value, particularly through value creation levers such as commercial excellence, platform roll-ups, and operational improvements. The geopolitical landscape is upending investment decisions and trade. Infrastructure investment has become a strategic tool in global politics, with countries using large-scale projects to extend influence, secure resources, or reshape trade networks. One emerging example is the race to build national AI infrastructure—particularly sovereign data centers designed to keep sensitive data within borders, control access to compute resources, and assert digital autonomy. Resource security is playing a growing role as wealthier nations and corporations engage in land acquisitions in resource-rich regions, securing access to critical materials needed for energy, technology, and industrial production. Shifting global supply chains are driving investments in new trade corridors and transport infrastructure, particularly in ASEAN manufacturing hubs and in industries linked to hydrogen-based energy and green ammonia production. As companies and nations seek to derisk supply chains, trends like nearshoring and friendshoring are reshaping global trade infrastructure, influencing where new investments are directed.