BlackRock and Microsoft raise $30 billion for AI investments

(Bloomberg) — BlackRock Inc. and Microsoft Corp. are partnering on one of the biggest projects yet to finance the expansion of databases and energy infrastructure that are driving the artificial intelligence boom.

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The companies, together with United Arab Emirates investment vehicle MGX, will raise $30 billion in private equity over time for the strategy and then use the money for potential investments of up to $100 billion, the companies said on Tuesday.

“The need to build data centers around the world is a multi-trillion-dollar investment,” BlackRock CEO Larry Fink said in an interview, adding that the Global AI Infrastructure Investment Partnership took months to prepare. “This is just a great example of how capital markets build infrastructure and scale up opportunities and new technologies.”

The infrastructure investments – including energy projects – will be made mostly in the US, but some of the funds will be used in US partner countries, the companies said in a statement. The plan envisages the involvement of other investors, and pension funds and insurers are interested in such long-term infrastructure investments, Fink said.

“We don’t think it will be a difficult task,” he said of raising the money.

The group includes Bayo Ogunlesi’s Global Infrastructure Partners, the asset manager that BlackRock is acquiring for about $12.5 billion, Abu Dhabi-based MGX, which was founded this year specifically to invest in AI, and Nvidia Corp., the chipmaker that will support the coalition with its expertise in AI data centers and factories. Nvidia has poured money into developing software, networking and other technologies that it says are essential for quickly assembling complete AI systems.

“The investment opportunity is real and the need for investment is even greater,” said Brad Smith, vice president and president of Microsoft, in the interview. AI “is the next general-purpose technology that will fuel growth in all sectors of the economy both 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 AI research lab OpenAI and is revamping its entire product line to include AI capabilities. The software company is dramatically increasing its own spending on data centers and computing infrastructure to provide those services and has said its ability to serve AI customers is limited by a lack of enough chips and data center capacity.

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Power consumption

Energy producers across the U.S. are racing to meet the rising demand from power-hungry AI data centers. According to Bloomberg Intelligence, electricity consumption at these facilities could increase to ten times current levels by 2030.

To meet this demand, energy companies are delaying the retirement of coal and gas-fired power plants, planning to build new gas-fired plants, and expanding clean energy like solar and wind farms. Competition for electricity has even made it take longer to connect new data centers to the grid. In Virginia’s Data Center Alley, it takes up to seven years.

“It is 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 U.S. has not grown dramatically, so we need to significantly increase the pace at which we develop new renewable energy plants.”

Microsoft also spoke with OpenAI co-founder and CEO Sam Altman, who is developing his own plans for collaboration between investor groups and technology companies to dramatically expand the computing infrastructure for AI products.

The Financial Times had previously reported on the partnership.

– With support from Robin Ajello, Josh Saul and Ian King.

(Updated with Fink comment in the third paragraph, Microsoft president in the seventh.)

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