Clean tech will hold strong if AI bubble bursts, says BlackRock: 'Age of electrification is upon us'

Even if the AI boom fizzles out, clean-tech investors shouldn’t expect the same fate for sustainable energy stocks, says Charles Lilford, the London-based co-manager of BlackRock’s $4.2 billion BGF Sustainable Energy Fund.

Speaking to Bloomberg, Lilford dismissed fears that an “AI bust” could spill over into the clean-tech sector.

“We don’t correlate any potential ‘AI bust’ as an existential risk to sustainable energy equities,” he said. “In fact, they could stand to benefit as US rates come down and the market broadens.”

The warning comes as investors grow uneasy about Big Tech’s AI spending spree. Alphabet, Meta, and Microsoft boosted capital expenditure by 89% in the last quarter alone – a total of $78 billion.

But Lilford argues the green transition is driven by deeper forces than data centre demand.

“The age of electrification is upon us,” he said. “This isn’t just about AI and data-center capex.”

Indeed, global investment in low-carbon technologies surpassed $2 trillion last year, according to Jefferies, with the S&P Global Clean Energy Transition Index up about 50% year-to-date.

BlackRock’s BGF fund – which holds First Solar, NextEra Energy, SSE, and Vestas – has climbed 32% so far in 2025.

Despite those gains, Lilford believes valuations remain compelling. “Many sustainable energy equities remain cheap relative to historical levels,” he said, pointing to structural tailwinds such as grid upgrades, electrified transport, and policy clarity in the US and Europe.

Notably, he also pushed back against investor fears over Donald Trump’s rollback of the Inflation Reduction Act, noting that his administration’s “One Big Beautiful Bill” still extends key IRA tax credits through 2030 – giving markets “clarity” for the rest of the decade.

Investor takeaway: Clean-tech is running down hill and that momentum will be hard to shift. Even Donald Trump's sweeping cuts to climate spending and regulation hasn't stopped the party, and it doesn't look like a (perhaps inevitable) AI bubble burst will make much difference either. Electrification, energy security, and long-term policy frameworks are creating durable value drivers – and for impact investors, that means clean bets are still very attractive.