KUALA LUMPUR (July 16): Asia is entering a multi-trillion-dollar energy capital expenditure cycle over the coming years as governments and utilities invest in electricity infrastructure to accommodate rising power demand, according to MetLife Investment Management.

The investment management said larger and more compute-intensive artificial intelligence (AI) models are driving higher electricity consumption by data centres, creating demand for power generation, grid upgrades, transmission infrastructure, power equipment, battery storage and renewable energy development.

“Perhaps the most underappreciated consequence of AI adoption is its impact on energy demand,” MetLife said in its 2026 mid-year Asia equity outlook.

The investment cycle is creating opportunities for power equipment manufacturers, electrical component suppliers, grid specialists and industrial companies that could benefit from infrastructure modernisation and rising data-centre power demand, it said.

Asian manufacturers are particularly well positioned to capture value from the investment cycle due to their advantages in production, scale and cost efficiency, according to the report. 

The development reflects a broadening of Asia’s AI investment story beyond semiconductors and data-centre infrastructure into memory, computing, power infrastructure, industrial systems and advanced manufacturing. 

MetLife said growing AI use had pushed technology companies to spend more on equipment, while strong demand created shortages in parts of the hardware supply chain.

The emergence of agentic AI, which can carry out tasks and make decisions with less human input, is expected to require more computing power and memory. 

That could support demand for chip components, packaging technologies and semiconductor materials, creating opportunities for more Asian technology companies. 

Taiwan and South Korea remain the biggest beneficiaries of Asia’s AI boom because of their strength in advanced chips and memory semiconductors, MetLife said.

However, technology stocks could remain volatile as investors question whether heavy AI spending can continue and whether valuations have risen too far.

MetLife also sees opportunities in China, particularly in AI hardware, power infrastructure and companies, supported by the country’s push for technological self-sufficiency.

It remained positive on Japan, supported by ongoing corporate and stock-market reforms.

Across Asean, opportunities are more selective, with domestic demand, infrastructure spending and supply-chain diversification providing support.

MetLife said investors should focus on companies with strong balance sheets and clearer earnings prospects as market performance becomes more uneven.