(Bloomberg) — BlackRock Inc. and Microsoft Corp. are teaming up in one of the largest efforts yet to fund the construction of data warehouses and energy infrastructure that are driving the rise of artificial intelligence.
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The companies, along with UAE investment vehicle MGX, will seek $30 billion of private capital over time for the strategy, which will then leverage money for up to $100 billion in potential investments, the companies said Tuesday.
“Building data centers globally is a multi-trillion dollar investment,” BlackRock CEO Larry Fink said in an interview, adding that the Global AI Infrastructure Investment Partnership has been in the works for months. “It’s a great example of how financial markets are building infrastructure and developing opportunities and new technologies.”
Infrastructure investments, including energy projects, will be made primarily in the United States, with some of the funds to be deployed in U.S. partner countries, the companies said in a statement. The plan includes bringing in additional investors, and pension funds and insurers are eager for such long-term infrastructure investments, Fink said.
“We don’t think it will be a difficult task,” he said of the fundraising.
The group includes Bayo Ogunlesi’s Global Infrastructure Partners, the fund manager that BlackRock is buying for about $12.5 billion; Abu Dhabi’s MGX, which was created this year specifically to invest in AI; and Nvidia Corp., the chipmaker that will support the coalition with its expertise in data centers and AI factories. Nvidia has been pouring money into building software, networking and other technology elements that it says are critical to quickly building comprehensive AI systems.
“The investment opportunities are real, and the investment needs are even greater,” Brad Smith, Microsoft’s corporate vice president and president, said in the interview. AI “is the next general-purpose technology that will fuel growth across every sector of the economy, in the United States and abroad.”
The companies have already discussed the plans with U.S. lawmakers and regulators, Smith said.
Microsoft has invested $13 billion in research lab OpenAI and is reshaping its entire product line around AI capabilities. The software maker is dramatically increasing its own spending on data centers and computing infrastructure to deliver those services and has said its ability to serve AI customers is limited by a lack of chips and data center capacity.
Electricity consumption
Energy producers across the United States are racing to meet surging demand from power-hungry AI data centers, with electricity consumption at such facilities poised to increase to 10 times current levels by 2030, according to Bloomberg Intelligence.
To meet this demand, energy companies are delaying the closure of coal and gas plants, planning to build new gas plants, and developing clean energy options like solar and wind farms. Competition for electricity has even led to an increase in the time it takes to connect new data centers to the power grid, with the time in Virginia’s Data Center Alley being as long as seven years.
“It’s clear today that the availability of electricity is one of the constraints not only on building data centers, but on electrification in general,” Ogunlesi said in the interview. “Electricity generation in the United States has not grown dramatically, so we’re going to have to dramatically accelerate the pace of development of new renewable power plants.”
Microsoft also spoke with OpenAI co-founder and CEO Sam Altman, who is developing his own plans for groups of investors and tech companies to collaborate on ways to dramatically expand the computing infrastructure for AI products.
The Financial Times had already mentioned this partnership.
–With assistance from Robin Ajello, Josh Saul and Ian King.
(Updated with Fink’s comment in third paragraph, Microsoft CEO’s in seventh.)
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