Nvidia and Elon Musk’s xAI have joined the AI Infrastructure Partnership (AIP), a consortium backed by Microsoft, BlackRock, and Abu Dhabi’s MGX, aiming to invest over $30 billion in AI infrastructure across the United States. The AIP’s goal is to address the substantial computational power and energy requirements of large-scale AI models by constructing specialized data centers.
Initially established in September 2024 with over $30 billion in funding, the partnership focuses on developing data centers equipped with advanced AI chips and energy projects essential for large-scale AI models. In fact, the first data center is planned for Abilene, Texas, expected to be operational by mid-2026, housing approximately 400,000 Nvidia AI chips with a capacity of 1.2 gigawatts.
Meanwhile, the energy facilities are designed to handle the intensive processing demands of AI technologies, ensuring efficient and reliable operations. Additionally, GE Vernova and NextEra Energy (a renewable energy company) will also join the consortium. NextEra Energy will focus on supply-chain planning (managing the flow of resources and materials) and high-efficiency energy solutions. According to Bloomberg’s report, by 2034, data centers alone will consume 1,580 terawatt-hours (TWh) of electricity per year.
Interestingly, the leading AI chipmaker – Nvidia – was already named as a technical advisor for the consortium when it was announced last year. As a technical adviser, Nvidia would provide expert guidance, insights, and recommendations related to AI, computing, or hardware technologies.
The substantial investment is expected to stimulate economic growth by creating jobs in the construction, technology, and energy sectors. This move is part of a broader effort to enhance AI infrastructure in the US, positioning the country as a leader in AI development.
The latest move comes months after the announcement of the Stargate Project, backed by SoftBank Group, OpenAI, Oracle and others. This joint venture intends to allocate $500 billion over the next 4 years to strengthen AI infrastructure in the United States, starting with $100 billion in the first year. SoftBank and OpenAI are each reportedly planning to contribute $19 billion in capital to Stargate in the initial year.
Also, at the start of this month, the world’s largest semiconductor manufacturer – Taiwan Semiconductor Manufacturing Company (TSMC) – announced at the White House that it will invest an additional $100 billion in the US to build three new semiconductor factories.
Coming back to the latest development, the addition of xAI to a Microsoft-backed consortium becomes interesting considering the current circumstances. xAI’s founder, Elon Musk is involved in a legal fight with OpenAI over its transition to a for-profit model. At the same time, Microsoft (which has invested around $13 billion in the ChatGPT maker so far) also seems to be ditching its exclusivity with OpenAI in recent days. Microsoft had already announced a change in its partnership with OpenAI last year, moving away from its previous exclusive role as the cloud provider for the AI trendsetter company’s computing needs.
