Is Rithm Capital (RITM) the Undervalued Infrastructure Play Powering the AI Revolution?

The AI revolution is no longer a speculative future-it is here, reshaping industries and demanding infrastructure at a scale unseen in decades. Yet, while much of the focus has centered on semiconductors, cloud computing, and algorithmic breakthroughs, one critical enabler remains underappreciated: energy infrastructure. As data centers consume power at unprecedented rates, the race to secure reliable, scalable energy solutions has become a defining challenge for the AI era. In this context, Rithm Capital (RITM) emerges as a compelling but overlooked player, with its diversified asset management platform and recent forays into energy infrastructure positioning it to capitalize on this energy-driven megatrend.

The Energy Bottleneck: AI's Hidden Infrastructure Challenge

AI's exponential growth is straining global energy grids. According to a report by BloombergNEF, global grid investment could exceed $470 billion in 2025 alone to meet surging demand, with data centers accounting for a significant portion of this load. McKinsey estimates that $5.2 trillion in investments will be required by 2030 to build and expand data centers capable of supporting AI processing. These figures underscore a stark reality: without robust energy infrastructure, the AI revolution risks stalling.

The U.S. Department of Energy's Speed to Power Initiative, launched in late 2025, highlights the urgency of accelerating grid modernization to accommodate AI-driven demand. Dynamic line ratings, AI-optimized smart grids, and advanced power flow control are becoming essential tools to address bottlenecks. Meanwhile, tech giants like Oracle and Microsoft are pivoting from energy procurement to direct on-site power generation, partnering with firms like Bloom Energy to deploy fuel cells and renewable energy solutions.

Rithm Capital's Strategic Positioning in Energy Infrastructure

Rithm Capital, a diversified alternative asset manager, has long focused on residential mortgage finance, servicing, and transitional lending. However, its recent strategic moves suggest a growing interest in energy infrastructure. In Q3 2025, the company announced a partnership with Scale Capital Partners to establish a global energy infrastructure platform. This initiative aligns with broader industry trends, as energy infrastructure firms like NextEra Energy and Brookfield Renewable secure long-term power purchase agreements with AI leaders such as Google and Microsoft.

While Rithm has not yet made explicit investments in renewable energy or grid solutions for AI operations, its existing business model provides a foundation for such expansion. The company's recent acquisitions-Crestline Management and Paramount Group-have expanded its capabilities in commercial real estate and direct lending, sectors that could intersect with energy infrastructure projects. Additionally, Rithm's emphasis on technology-driven efficiency, exemplified by its Rezi AI platform, demonstrates a willingness to leverage innovation to enhance value creation.

The Case for Rithm as an Undervalued Play

Rithm's current valuation appears to understate its potential in the energy infrastructure space. The company reported EAD of $291.1 million in Q2 2025, with Newrez LLC, its mortgage servicing subsidiary, achieving a 20% ROE and a $878 billion servicing portfolio. These metrics highlight Rithm's operational strength and capacity to scale. If the firm redirects even a fraction of its capital toward energy infrastructure-whether through renewables, grid modernization, or partnerships with AI-driven tech firms-it could unlock significant upside.

Consider the broader market dynamics: Oracle's $30 billion commitment to secure power for AI infrastructure and Microsoft's €6.69 billion investment in Spain for renewable-powered data centers illustrate the scale of opportunity. Rithm's existing expertise in asset management and its recent energy infrastructure partnership position it to participate in this market without starting from scratch.

Risks and Considerations

Critics may argue that Rithm's current focus remains firmly in non-energy sectors, with no direct investments in AI-specific energy projects. Indeed, Q3 2025 earnings reports emphasize growth in residential lending and commercial real estate but omit details on energy infrastructure allocations. However, this lack of specificity could also be viewed as a strategic advantage: Rithm's diversified platform allows it to pivot quickly as energy infrastructure opportunities crystallize.

Moreover, the energy transition faces headwinds, including supply chain delays and regulatory hurdles. According to BloombergNEF, the global grid investment could exceed $470 billion in 2025 alone to meet surging demand. Rithm's success will depend on its ability to navigate these challenges while leveraging its capital efficiency and operational expertise.

Conclusion: A Catalyst Waiting to Be Recognized

The AI revolution is not just a technological shift-it is an energy revolution. As data centers consume power at gigawatt scales, the companies that can secure and optimize energy infrastructure will play a pivotal role in shaping the future. Rithm Capital, with its diversified asset management platform and recent forays into energy infrastructure, is uniquely positioned to benefit from this trend. While it may not yet be a household name in the AI energy space, its strategic moves and operational strength suggest it could emerge as a key player. For investors seeking an undervalued infrastructure play, Rithm's potential to power the AI revolution is worth watching closely.