Tech giants seek to raise $100b to invest in AI-powered data centres

• Partnership between BlackRock, Microsoft, Global Infrastructure Partners, Nvidia, and UAE’s MGX represents one of the most ambitious efforts to finance AI infrastructure to date.
• Global AI Infrastructure Investment Partnership focuses on constructing data centres and energy infrastructure predominantly within the US, although some funding will also benefit US partner countries.

The alliance between BlackRock and Microsoft marks a significant advancement in the financing and development of infrastructure necessary to support the growing demands of artificial intelligence (AI).

Together with the United Arab Emirates’ MGX investment vehicle, they aim to mobilise $30 billion in private equity capital, which could facilitate investments totaling up to $100 billion.

MGX was launched in March by two founding partners: global investment company Mubadala and artificial intelligence firm G42.

The initiative underscores the urgent need for extensive global data centre development; highlighted by BlackRock CEO Larry Fink’s assertion that financing for such infrastructure requires trillions of dollars.

The partnership, formally known as the Global AI Infrastructure Investment Partnership (GAIP), has been in progress for several months.

It is primarily focused on constructing data centres and energy infrastructure predominantly within the United States, although some funding will also benefit US partner countries.

Collaborative effort

The collaborative effort looks to appeal to a range of investors, especially pension funds and insurers, who are increasingly seeking long-term infrastructure investment opportunities. Fink expresses confidence in their ability to raise the requisite capital, reflecting the high level of interest in such ventures.

In addition to BlackRock and Microsoft, the coalition includes Global Infrastructure Partners and Nvidia Corp., which will contribute its extensive expertise in AI data centres. Nvidia’s investment in essential technologies to expedite the formation of comprehensive AI systems further solidifies this initiative’s foundation.

Microsoft’s substantial $13 billion investment in AI research through OpenAI illustrates its commitment to AI advancements, framing the technology as a critical catalyst for economic growth across sectors.

AI to drive GDP by 3.5%

According to research firm International Data Corporation, Artificial Intelligence will contribute $19.9 trillion to the global economy through 2030 and drive 3.5 per cent of global GDP in 2030.

A substantial challenge for this initiative lies in meeting the escalating energy demands of these data centres, which are projected to surge by up to tenfold by 2030.

According to the research, in 2030, every new dollar spent on business-related AI solutions and services will generate $4.60 into the global economy, in terms of indirect and induced effects.

The looming electricity requirement compels energy producers to adapt, prompting delays in the retirement of traditional coal and gas plants while accelerating the development of renewable energy sources.

The competition for electricity is already evident, as seen in Virginia, where the connection of new data centres to the power grid has extended to as much as seven years.