BlackRock and Microsoft are ready to invest in a $30 billion fund for AI infrastructure for data centers and energy projects.
Key Takeaways
- Microsoft and BlackRock collaborated to launch $30 billion, which can extend to $100 billion, for AI infrastructure.
- MXG, an investment company in Abu Dhabi, contributed as a general partner.
- Nvidia participated in supporting GAIIP to design AI data centers and factories.
BlackRock and Microsoft Partnership
BlackRock and Microsoft collaboration is ready to embrace the world of AI with a $30 billion fund to invest in AI infrastructure. They are investing in building data centers and energy projects, as reported by companies on 17 Sep 2024.
It is recorded as a huge investment created in the history of Wall Street, addressing financial interest in artificial intelligence infrastructure.
Microsoft, BlackRock, MGX, and Global Infrastructure Partners (GIP) formed the Global AI Infrastructure Investment Partnership (GAIIP) to fund the massive investment project. They intend to expand data centers to meet the increased demand for processing power, aiming to enhance the AI supply chain and energy sources.
Microsoft and BlackRock further stated that MGX, the UAE investment company, will serve as a general partner in the fund. While Nvidia (NVDA.O) will show expertise in AI data centers and factories to benefit the ecosystem, supporting GAIIP.
To run AI models enhanced processing power is required and they count as more energy-intensive than backdated technology. It raised concerns about capacity issues. As a result, this investment fund aims to alleviate these worries by constructing the required energy and computer infrastructure to support AI developments.
AI computing requirements have forced tech companies to cluster thousands of chips to achieve the necessary level of data-crunching power, leading to a spike in demand for these specialized data centers.
The founders plan to extend the equity from the initial $30 billion to $100 billion in the future to develop data centers and renewable energy projects. It also includes an additional $70 billion in debt financing.
The CEO of BlackRock, B. Larry Fink, stated,
“Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multitrillion-dollar long-term investment opportunity.”
In January, BlackRock made a statement to acquire GIP for $3 billion in cash and their stocks of 12 million shares. Last week, they announced that they would close a deal on Oct 1.
Brad Smith, vice chair and president of Microsoft, also contributed with his statement:
“The capital spending needed for AI infrastructure and the new energy to power it goes beyond what any single company or government can finance. This financial partnership will not only help advance technology but enhance national competitiveness, security, and economic prosperity.”
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Microsoft is the leading company when it comes to capital expenditure for its Azure public cloud to support infrastructure expansion. Microsoft reported in July that fiscal fourth-quarter capital investment reached $19 billion, including assets bought through finance leases.
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