BlackRock and Microsoft are teaming up to launch a massive artificial intelligence (AI) investment fund worth over $30 billion. The fund aims to address the increasing demands for data centers and energy projects that are necessary for AI development. BlackRock’s infrastructure investment unit, Global Infrastructure Partners, is partnering with Microsoft and MGX, an Abu Dhabi-backed investment company, in this venture. Nvidia, a fast-growing chipmaker, will provide advice on factory design and integration.
The Global AI Investment Partnership seeks to raise up to $30 billion in equity investments and leverage an additional $70 billion in debt financing. This partnership would be one of the largest investment vehicles ever raised on Wall Street. It comes as the computing power required for AI surpasses previous technological innovations, putting strain on existing energy infrastructure.
The fund marks GIP’s first major initiative since agreeing to be acquired by BlackRock for $12.5 billion earlier this year. The deal is set to close in October. BlackRock sees the energy sector as a significant growth opportunity and believes that investing in AI infrastructure like data centers and power will unlock a long-term multitrillion-dollar investment opportunity.
This new fund is part of a growing trend among asset managers who are addressing the rising demand for energy needed to power generative AI and cloud computing technologies. Earlier this year, Microsoft pledged support for $10 billion worth of renewable electricity projects developed by Canada’s Brookfield Asset Management.
The International Energy Agency predicts that global electricity consumption by data centers could exceed 1,000 terawatt-hours by 2026—more than double the amount used in 2022.
Jensen Huang, founder of Nvidia, stated that accelerated computing and generative AI are driving the need for increased AI infrastructure during the next industrial revolution.
In addition to meeting energy demands related to AI development, there is also a need for significant private capital investments in essential infrastructure overall.
