BlackRock Inc. and Microsoft Corp. have partnered with MGX, a United Arab Emirates state-backed investor, to launch the Global AI Infrastructure Investment Partnership.
The artificial intelligence fund aims to raise $30 billion in private equity capital to invest in data centers and AI infrastructure in the United States and partnering countries. The partnership intends to bring the total investment potential of the fund to $100 billion with debt financing. GAIIP would be the largest alternative investment fund ever raised by BlackRock. AI industry leader Nvidia Corp. will support GAIIP by providing insights into AI data centers and identifying improvements needed to strengthen the U.S. position in the global AI race.
“Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multi-trillion-dollar long-term investment opportunity,” Chairman and CEO of BlackRock Laurence Fink said in a Microsoft press release. “Data centers are the bedrock of the digital economy, and these investments will help power economic growth, create jobs, and drive AI technology innovation.”
Traditional data centers cannot support the immense computing power required by AI processes. GAIIP seeks to supplement the increasing demand by developing advanced data centers dedicated to AI systems. Cisco Systems Inc. announced a similar $1 billion AI investment fund earlier this year, supporting various startups in AI software and infrastructure.
Private equity giant Blackstone Inc. has also been a prominent force in the AI infrastructure sector and is actively developing a $25 billion data center empire throughout the United States and numerous other countries.
“If chips were the picks and shovels of the AI revolution, data centers are the engines driving its expansion, and these are engines that need a ton of fuel,” technology reporter Deirdre Bosa said on a recent episode of CNBC’s “TechCheck.” “This new fund that can deploy up to $100 billion in total capital is just the latest to address that enormous need for more infrastructure and energy as AI models become more complex and require more compute power.”
The robust demand for new data centers has raised public concern over the economic and social impacts of AI infrastructure. A report by The Goldman Sachs Group Inc. estimates that an additional 47 gigawatts of power generation capacity will be required to meet U.S. power demand growth by 2030. One gigawatt can power over 750,000 households annually, and investment funds such as GAIIP are crucial for reducing the strain on the aging U.S. power grid.
“Currently, if you put an AI data center on a power grid, it won’t be enough to supply the power to the data center or it’s going to impact the other places that are powered by that grid,” Bloomberg Intelligence senior analyst Mandeep Singh said on an episode of “Bloomberg: The Asia Trade.” “Clearly there is a need to upgrade that infrastructure as well─the electricity and the power─and that applies globally.”
GAIIP aims to set a new standard for AI investments, positioning the U.S. as a leader in the rapidly expanding field of AI technology. As global demand for AI capabilities continues to surge, these investments will create new economic opportunities across multiple sectors. GAIIP could serve as a blueprint for similar initiatives worldwide, which could further drive innovation for the future digital economy.
“The capital spending needed for AI infrastructure and the new energy to power it goes beyond what any single company or government can finance,” Vice Chair and President of Microsoft Brad Smith said in a Blackrock press statement. “This financial partnership will not only help advance technology, but enhance national competitiveness, security, and economic prosperity.”
