BlackRock, Microsoft, along with Global Infrastructure Partners and MGX, have now announced plans to launch a new fund aimed at supporting the rapidly growing artificial intelligence (AI) industry. The newly established Global AI Infrastructure Investment Partnership (GAIIP) will focus on creating AI data centers and developing energy projects to meet the increasing computational and energy needs of AI tech. This will be yet another massive financial investment from Microsoft into AI, considering the billions of dollars it has already put in OpenAI.
The GAIIP fund seeks to raise an initial $30 billion in equity capital, with the potential to leverage up to $70 billion in additional investments through debt financing. The fund’s total investment capacity could reach as much as $100 billion, with the goal of constructing new data centers and expanding existing ones to meet the surging demand for AI technologies. These investments will be concentrated in the US, with additional funding directed toward key international partner countries.
Why is this necessary? AI tech, particularly those used in deep learning, machine learning, and large-scale data processing, require an immense amount of computational power. The rapid growth of AI applications in recent years, including generative models like OpenAI’s ChatGPT, has led to a surge in demand for specialized data centers that are capable of handling the massive volumes of data generated by AI systems. These technologies rely on vast numbers of powerful processing chips, such as Nvidia’s GPUs, arranged in clusters to perform the data-crunching tasks necessary for AI functionality.
However, the expansion of AI infrastructure is not without its challenges. One of the most significant hurdles is the strain AI places on existing energy systems. The sheer power consumption required to operate AI data centers far exceeds that of traditional data processing systems, creating the need for energy investments to support AI development. This is where the GAIIP fund comes in, and aims to solve this issue by investing in energy infrastructure to ensure the availability of sustainable and reliable power sources for AI applications. This comes even as the global electricity consumption by data centers is expected to exceed 1,000 terawatt-hours by 2026, more than doubling the amount used in 2022, according to the International Energy Agency (IEA). This dramatic increase highlights the urgency of building energy infrastructure that can support the growth of AI.
“We are committed to ensuring AI helps advance innovation and drives growth across every sector of the economy,” Satya Nadella, Chairman and CEO of Microsoft, commented on the matter. “The Global AI Infrastructure Investment Partnership will help us deliver on this vision, as we bring together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way.” “Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multi-trillion-dollar long-term investment opportunity,” Larry Fink, Chairman and CEO of BlackRock, commented on the matter. “Data centers are the bedrock of the digital economy, and these investments will help power economic growth, create jobs, and drive AI technology innovation.”
The GAIIP initiative brings together expertise from various sectors, including technology and finance. MGX, an Abu Dhabi-backed investment firm, will play a key role as a general partner, while Nvidia, a leading AI chip manufacturer, will provide its expertise in AI data centers and factory design. The new fund comes at a time when Microsoft has already been betting big on AI – the tech giant has, so far, made substantial investments in AI and cloud infrastructure, including a $10 billion commitment to renewable energy projects earlier this year through Canada’s Brookfield Asset Management. Microsoft has also set a goal to ensure that all of its energy consumption is matched by zero-carbon energy by 2030
