In the American Southwest, there is a section of an old highway where diners still have their signs up. The painted letters promoting “Home Cooking” and “Clean Rooms” were barely discernible against the glare of the desert, sun-bleached and cracked at the edges. No one stops these days. There is no water in the pumps. The motels are secured. Once America’s main commercial thoroughfare in the middle of the 20th century, Route 66 is now primarily a tourist attraction that travelers take pictures of on their way somewhere else.
It’s difficult to ignore how little this image has evolved over the past forty years. For anyone who currently has money invested in infrastructure, it is even more difficult to ignore what it is trying to say.
| Category | Details |
|---|---|
| Route Established | 1926, running 2,448 miles from Chicago to Santa Monica |
| Peak Economic Era | 1940s–1960s, driving entire local economies along its corridor |
| Cause of Decline | Interstate Highway System (1956), rendering Route 66 commercially obsolete by 1985 |
| Official Decommission | 1985 — removed from the U.S. Highway System |
| Global Infrastructure Need | $106 trillion required by 2040 (McKinsey Global Institute) |
| Largest Investment Vertical | Transport & Logistics — $36 trillion |
| Private Infrastructure AUM | Grew from ~$500B (2016) to $1.5 trillion (2024) |
| Key Modern Verticals | Energy, Digital, Transport, Social, Water, Agriculture, Defense |
| Fastest-Growing Category | Data centers, EV charging networks, fiber-optic grids |
| Biggest Investor Risk | Funding assets on today’s demand without accounting for tomorrow’s disruption |
There is more to the tale of Route 66 than just a road. It’s a tale of capital misallocation, with communities, investors, and even governments investing large sums of money in seemingly permanent physical assets, only to watch those assets become stranded virtually overnight.
Route 66 did not completely collapse when the Interstate Highway System started to thread its faster, cleaner routes across the continent in the late 1950s. It simply became irrelevant over time. The diners lost patrons. The gas stations were no longer useful. An entire economic ecosystem that appeared to be perfectly stable on the outside just vanished.
In retrospect, this pattern almost seems inevitable because it has occurred so frequently throughout modern economic history. The industrial corridors of Detroit. The cutlery industry in Sheffield. Wales and Appalachian coal towns.
There is a rhythm to it: an industry or asset gains dominance, draws in capital, develops reliance, and then is surpassed by something quicker, less expensive, or just better suited to the real direction of the world. Investors who read the shift ahead of time escape unscathed. Those who make excessive commitments to what already exists often end up with something that looks like a closed diner on a deserted highway.
According to McKinsey, the world will need to invest a total of about $106 trillion in infrastructure by 2040. That figure is astounding, which is why it sounds so. Of that total, $36 trillion comes from transportation and logistics alone; another $23 trillion comes from energy and power; and $19 trillion comes from digital infrastructure, which includes fiber-optic networks, hyperscale data centers, and the connective tissue of an AI-driven economy.
Infrastructure is currently arguably the most sought-after asset class in institutional investing, with private infrastructure assets under management having already tripled since 2016 and reaching $1.5 trillion in 2024. At that point, the lesson from Route 66 becomes worthwhile.
The size of the investment is not the issue. The inclination to draw a clear boundary around infrastructure and make investments within it is the issue. Roads, ports, power grids, bridges, and other large, slow-moving physical assets with steady cash flows and long lifespans were considered infrastructure for the majority of the 20th century. Some of the things being constructed today still fit that description.
However, the most significant infrastructure being built today is increasingly found at the intersections—where energy meets digital, where transportation meets AI, where conventional steel-and-concrete assets meet IoT sensors, predictive maintenance platforms, and decentralized power networks.
Infrastructure is what a data center is. This also applies to a fiber-optic cable that runs beneath a sidewalk in a city. An EV charging station is also located in a parking lot that used to have diesel pumps ten years ago. Investors who view these items as distinct categories fail to recognize how interdependent they have become.
Akin to the motel owners along Route 66 in 1955, the investor who places large bets on physical roads while ignoring autonomous vehicle systems that will eventually change traffic demand is assuming that cars will always need to stop where they have always stopped.
This risk may be present in some of today’s most assured infrastructure bets. Some assets that are funded as essential long-term infrastructure, such as some traditional transportation corridors or specific types of fossil fuel pipeline networks, may already be closer to their Route 66 moment than their balance sheets indicate. The use of AI in industrial systems and the switch to renewable energy are not far-off goals. Demand is already being reshaped by operational realities in ways that cashflow models won’t fully reflect until it’s too late to reposition.
However, it’s also important to remember that Route 66 did not disappear because roads ceased to be important. It died because a particular road ceased to be the most advantageous choice. The infrastructure requirement moved, not vanished. For contemporary investors who might interpret this lesson as support for pessimism, that distinction is crucial. It isn’t.
There is an urgent need for $106 trillion. In every vertical, including energy, water, social infrastructure, digital networks, and defense, there is a huge gap between what is available and what the world needs. It’s a real opportunity.
However, the governments and investors most likely to prosper in this setting will be those who are prepared to think in intersections rather than verticals, to fund assets for where demand is going rather than where it is now, and to be truthful about the distinction between an asset that is necessary and one that just appears stable. The infrastructure investment community seems to be starting to realize this, though maybe not quickly enough or widely enough.
There’s something almost educational about the quiet as you stand on the edge of a Route 66 ghost town in the Mojave. The highway itself remains intact. Although cracked, the asphalt is still intact. There was no failure of the physical structure.
Without it, the world simply went on. The lesson is not that infrastructure is a bad investment, but rather that the wrong infrastructure, financed at the wrong time with the wrong presumptions about permanence, ends up being just as useless as a deserted gas station in the middle of nowhere.
Future generations’ economies will be shaped by the $106 trillion being spent over the next fifteen years. A portion of it will go toward funding something akin to the Interstate Highway System, which is audacious, forward-thinking, and truly revolutionary. Most likely, some of it will go toward funding the next Route 66. Knowing which is which before the signs start to fade is the responsibility of those who write the checks.