Brookfield Infrastructure Posts Record Year, Boosts Payout as AI Demand Fuels Data Center Boom
Brookfield Infrastructure Partners (NYSE: BIP) closed the books on a robust 2025, leveraging surging demand for data infrastructure to deliver solid funds from operations (FFO) growth and another hike to its investor payout. Executives, speaking on the Q4 earnings call, framed the year as one of strategic execution, balancing record asset sales with targeted investments in high-growth areas like AI-supporting data centers and industrial gas.
The partnership reported full-year FFO of $2.6 billion, a figure that rose a normalized 10% year-over-year after adjusting for asset sales and currency swings. This performance, CFO David Krant noted, hit the company's targets and reflected underlying operational strength. The quarterly distribution was subsequently increased by 6%, marking the 17th straight year of raises of at least 5%.
Capital recycling reached a new peak, with $3.1 billion in asset sale proceeds—surpassing a $3 billion goal—funding growth initiatives without straining the balance sheet. Brookfield ended the year with a hefty $6 billion in total liquidity.
The data segment emerged as the star narrative. Udhay Mathialagan, Head of Global Data Center Businesses, detailed "record bookings" and a development pipeline now standing at approximately 3.6 gigawatts. He emphasized a cautious, contracted approach to the AI infrastructure gold rush, citing five "guardrails" including investment-grade customers and a ban on speculative building. This discipline, he argued, allows Brookfield to capture developer profits—CEO Sam Pollock cited yields of 9-10% on development versus monetization cap rates of 5.5-6%—while mitigating technology and overbuilding risks.
Beyond data, Brookfield deployed capital into adjacent AI-enabling sectors. This included a 55 MW behind-the-meter power project for a data center and the acquisition of a South Korean industrial gas supplier to semiconductor makers. Pollock expressed confidence in a "highly constructive" 2026 backdrop, driven by digitalization and AI, positioning the firm to resume its 10%+ per-unit FFO growth trajectory.
Market Voices: Analyst & Investor Reactions
Eleanor Vance, Senior Infrastructure Analyst at Clearwater Advisors: "The numbers speak to a well-oiled machine. Their capital recycling discipline is exceptional, allowing them to pivot into high-conviction themes like data infrastructure without over-leveraging. The contracted, investment-grade approach in data centers is a prudent differentiator in a frothy market."
Marcus Thorne, Portfolio Manager at Horizon Capital: "Another year, another distribution hike. The 17-year track record is impressive, but the real story is the strategic repositioning. They're not just riding the AI wave; they're building the ports and power grids for it with a focus on hard assets and contracted cash flows. The guided return to double-digit growth is what the market wanted to hear."
Rebecca Shaw, Editor at 'The Critical Investor' Newsletter: "Let's not get carried away. A 10% normalized FFO growth is good, but is it enough for the premium valuation? Their 'guardrails' in data centers sound great, but everyone's saying that now. The sector is drowning in capital, and 'investment-grade' counterparties can still renegotiate or fail. This feels like a late-cycle narrative push to me."
David Chen, Principal at Oakhaven Family Office: "The industrial gas deal in Korea is a clever, under-the-radar move. It's a direct play on semiconductor manufacturing, which is foundational to AI, but through an essential, utility-like service. It shows they're thinking about the entire AI value chain, not just the flashy data centers. That diversification within a theme is smart capital allocation."