BlackRock, Microsoft to raise $30 billion for AI infrastructure development
What's the story
BlackRock and Microsoft have announced a strategic partnership to raise $30 billion in private equity capital.
This initiative, also involving the UAE's MGX investment vehicle, aims to support the expansion of data warehouses and energy infrastructure, essential for artificial intelligence (AI) development.
The funds raised will potentially be leveraged into investments worth up to $100 billion over time.
Partnership details
Global AI Infrastructure Investment Partnership in the works
The partnership, known as the Global AI Infrastructure Investment Partnership, has been in development for several months.
BlackRock CEO Larry Fink highlighted the significant financial requirements of establishing global data centers.
He expressed confidence in attracting additional investors for long-term infrastructure investments, stating that "pensions and insurers are eager for such long-term infrastructure investments."
Coalition support
Major players join forces for AI infrastructure development
The partnership includes Global Infrastructure Partners, led by Bayo Ogunlesi, and Abu Dhabi's MGX.
Additionally, chipmaker NVIDIA will contribute its expertise in AI data centers and factories to the coalition.
Microsoft's Vice Chairman and President Brad Smith emphasized that AI, "Is the next general purpose technology that will fuel growth across every sector of the economy both in the United States and abroad."
Investment hurdles
Microsoft's significant investments in AI
Microsoft has already invested around $13 billion in AI research lab OpenAI, and is restructuring its entire product range around AI capabilities.
The company is significantly increasing its spending on data centers, and computing infrastructure to deliver these services.
However, it faces challenges due to a shortage of chips and data center capacity.
Energy needs
Rising energy demands and strategies to meet them
AI data centers in the US are expected to increase their electricity consumption by up to 10 times by 2030, as per Bloomberg Intelligence.
To meet this demand, energy companies are postponing the retirement of coal and natural gas plants, planning new gas plants, and expanding into renewable energy sources like solar and wind farms.