Nuveen LLC’s head of private fixed‑income, Laura Parrott, is steering the firm’s roughly $75 billion investment‑grade portfolio toward energy and utilities credits that sit on the periphery of the artificial‑intelligence boom. While data‑center and chip makers dominate headlines, Parrott argues that “plain‑vanilla” infrastructure—power lines, substations and fuel supply—will capture AI‑related demand regardless of the technology’s trajectory.

AI tailwinds are pushing utilities to expand capacity, boosting demand for reliable power and grid upgrades. Credit analysts see tighter supply chains and higher pricing power for firms that own transmission assets, translating into tighter spreads for investment‑grade bonds. Parrott’s strategy positions Nuveen to earn modest yield premiums while preserving capital as the sector remains insulated from AI hype cycles.

Investors seeking exposure to AI’s indirect benefits can now tilt toward energy‑focused credit funds, which have already outperformed broader high‑yield indices this year. The approach offers a defensible hedge against volatility in pure‑play tech debt, delivering steady cash flow without betting on the uncertain path of AI hardware deployment.

By allocating to these “picks and shovels” credits, fund managers can capture modest spread compression as utilities benefit from AI‑induced load growth. The strategy also diversifies credit exposure away from overvalued semiconductor issuers, offering a pragmatic play for fixed‑income desks that want measurable returns without speculative tech risk.