BlackRock, Microsoft, others form AI and energy infrastructure investment partnership

BlackRock, Microsoft, others form AI and energy infrastructure investment partnership | ESG Dive

Dive Brief:

- BlackRock, Microsoft, Global Infrastructure Partners and United Arab Emirates-based technology investment firm MGX announced a partnership Tuesday to invest in new and expanded data center infrastructure to meet artificial intelligence computing needs and the energy supply needed to support these facilities.
- The deal will primarily focus on U.S. based infrastructure investments and will initially seek to raise $30 billion in private equity capital, according to the press release. Nvidia will also support the partnership, lending the partnership its AI data center and factory expertise.
- The Global AI Infrastructure Investment Partnership will look to meet the rapidly growing energy supply needs of the booming AI industry and ultimately seek to mobilize $100 billion in total investment potential when debt financing is included.

Dive Insight:

Microsoft President Brad Smith said in the release that the funding necessary to build out AI infrastructure and power it “goes beyond what any single company or government can finance.” Smith said beyond financial collaboration, the partnership would also help advance related technology and boost economic prosperity and security.

In addition to data centers and AI factories, the partnership will also invest in the energy infrastructure needed to power and engage with industry leaders on AI supply chains and energy sourcing, according to the release.

Data center electricity demand is expected to increase 22% by 2035, in part due to increased AI infrastructure needs, research firm Rhodium Group projected in July. Energy companies are now planning to build new natural gas power generation plants at a quickening pace to keep up with that demand, Bloomberg reported Monday.

“Building the necessary infrastructure required to advance and accelerate the adoption of AI will reshape and revitalize almost every aspect of how we live,” MGX CEO Yahia Al Idrissi said Tuesday. “New data centers and power sources will enable growth and commerce in the future innovation economy.”

The UAE-based MGX was launched this year specifically to invest in AI and other advanced technologies, like AI infrastructure, enabled technologies and semiconductors.

The companies said GAIIP will have an open architecture and look to engage a broad ecosystem that will provide partners and other companies with “full access on a non-exclusive basis.”

BlackRock CEO Larry Fink said in the release that he believes mobilizing funding for AI infrastructure, like data centers and the energy needed to power them, will “unlock a multi-trillion dollar long-term investment opportunity.”

“Data centers are the bedrock of the digital economy,” Fink said in the release. “These investments will help power economic growth, create jobs and drive AI technology innovation.”

BlackRock and GIP will soon become a single entity, following an announced acquisition in January. The Federal Energy Regulatory Commission approved the investment manager’s $12.5 billion acquisition of the global independent infrastructure manager on Sept 6, and BlackRock said in a press release and subsequent securities filing that it expects the deal to close on Oct. 1.

The move represents Microsoft’s latest work on AI and infrastructure, and CEO Satya Nadella said in the release that the company is focused on “ensuring AI helps advance innovation and drive growth” across the economy.

The tech giant recently announced the creation of a supply chain decarbonization team that will focus, in part, on tackling scope 3 emissions related to Microsoft’s AI and cloud operations. In July, Microsoft — joined by Amazon, Google, Meta and other governing board members of a digital infrastructure climate coalition — urged data center suppliers to begin including lifecycle emissions on parts to help accelerate the sector’s decarbonization.