Energy companies across the US are urgently working to accommodate the rising electricity needs of power-hungry AI data centers. According to Bloomberg Intelligence, the electricity usage by these facilities is expected to increase up to 10 times current levels by 2030. This surge in demand is driving significant investments and infrastructural changes within the energy sector.
In response to this burgeoning demand, BlackRock Inc. and Microsoft Corp. have announced a groundbreaking partnership aimed at investing in AI infrastructure. The Global AI Infrastructure Investment Partnership, as the initiative is called, is set to attract $30 billion in private equity capital. This capital will be leveraged to potentially generate up to $100 billion in investments, focusing on building and enhancing infrastructure essential for AI development.
The investments will primarily target infrastructure projects in the US, including energy-related ventures. A portion of the funds will also be allocated to projects in US partner countries. This strategic approach aims to support the extensive infrastructure required to sustain the rapid growth of AI technologies.
Larry Fink, BlackRock's Chief Executive Officer, highlighted the potential of this initiative in a recent statement. He emphasized that mobilizing private capital to develop AI infrastructure, such as data centers and energy projects, will unlock substantial long-term investment opportunities. This investment is seen as crucial for supporting the exponential growth of AI technologies and the related infrastructure.
The partnership between BlackRock and Microsoft also involves collaboration with Global Infrastructure Partners (GIP) and Abu Dhabi’s MGX. MGX was specifically created this year to invest in AI-related infrastructure. Additionally, Nvidia Corp. is supporting the coalition with its expertise in AI data centers and technologies. Nvidia’s contributions include advancements in software, networking, and other technologies necessary for the rapid assembly of AI systems.
Earlier this year, BlackRock announced its intention to acquire GIP for approximately $12.5 billion. This acquisition is scheduled to be completed on October 1, further solidifying BlackRock’s commitment to expanding its infrastructure investment capabilities.
Microsoft has already made significant investments in AI, including a $13 billion stake in AI research lab OpenAI. The company is also revamping its product line to integrate AI features and is dramatically increasing its expenditure on data centers and computing infrastructure. Microsoft has acknowledged that its ability to support AI customers is constrained by limited chip availability and data center capacity.
The growing electricity demands from AI data centers have prompted energy companies to adapt their strategies. To address the anticipated surge, many companies are delaying the retirement of coal and gas plants and are planning new gas plants. Concurrently, there is an increased focus on expanding clean energy sources, such as solar and wind farms. The competition for electricity has also led to longer wait times for connecting new data centers to the power grid, with delays stretching up to seven years in some regions like Virginia’s Data Center Alley.
Microsoft is also engaging with OpenAI co-founder and CEO Sam Altman to explore collaborative efforts for expanding computing infrastructure for AI. Altman is working on plans to involve investors and tech companies in significantly increasing the capacity for AI products.
Conclusion
The rising demand for AI data centers is reshaping the energy and investment landscapes. BlackRock and Microsoft’s strategic partnership represents a significant step in addressing this demand and advancing the development of AI infrastructure. The combined efforts of these industry leaders and their global partners aim to meet the future needs of AI technologies while ensuring sustainable and efficient energy use.