BlackRock and Microsoft Join Forces to Invest $30 Billion in AI Infrastructure Empire

BlackRock and Microsoft Join Forces to Invest $30 Billion in AI Infrastructure EmpireOn September 14, asset management giant BlackRock and tech giant Microsoft announced a joint venture to build AI infrastructure, aiming to attract $30 billion in private equity capital and expand total investment to $100 billion. This strategy, dubbed the "Global AI Infrastructure Investment Partnership," will focus on investing in data centers and other critical infrastructure supporting the growth of artificial intelligence

BlackRock and Microsoft Join Forces to Invest $30 Billion in AI Infrastructure Empire

On September 14, asset management giant BlackRock and tech giant Microsoft announced a joint venture to build AI infrastructure, aiming to attract $30 billion in private equity capital and expand total investment to $100 billion. This strategy, dubbed the "Global AI Infrastructure Investment Partnership," will focus on investing in data centers and other critical infrastructure supporting the growth of artificial intelligence.

According to a joint statement, most of the investment will be concentrated in the United States, encompassing various sectors, including energy projects, with some investment directed towards countries collaborating with the United States. BlackRock CEO Larry Fink stated in the announcement, "Mobilizing private capital to build AI infrastructure, such as data centers and power, will unlock trillions of dollars in long-term investment opportunities."

Beyond BlackRock and Microsoft, the alliance includes Global Infrastructure Partners (GIP) and MGX from Abu Dhabi, specifically established for investing in AI. Chip manufacturer NVIDIA will also support the alliance with its expertise in AI data centers and factories. NVIDIA has heavily invested in developing software, networks, and other technologies crucial for AI, emphasizing their critical role in rapidly assembling complete AI systems.

As the world's largest asset manager, BlackRock announced in January the acquisition of Global Infrastructure Partners (GIP) for $125 billion, with completion expected on October 1. Meanwhile, Microsoft has invested $130 billion in OpenAI and comprehensively revamped its product line around AI functionalities. To deliver these services, Microsoft is significantly increasing its investment in data centers and computing infrastructure. However, the company also acknowledges limitations in its ability to serve AI clients due to insufficient chip and data center capacity.

The immense energy demand of AI data centers has also attracted the attention of the energy sector. Bloomberg Intelligence data estimates a tenfold increase in energy consumption for these data centers by 2030. To accommodate this demand, energy companies are delaying the retirement of existing coal and natural gas power plants, planning new natural gas plants, and expanding clean energy sources like solar and wind power. The competition for electricity has even led to extended timelines for connecting new data centers to the grid, with the process taking up to seven years in "DataCenterAlley," a concentrated area of data centers in Virginia.

Besides collaborating with energy companies, Microsoft has explored potential partnerships with Sam Altman, OpenAI co-founder and CEO, to scale the computational infrastructure required for AI products through collaborations with investors and tech companies.

The partnership between BlackRock and Microsoft signifies a new phase in the development of the AI industry. By mobilizing private capital to construct robust infrastructure, the collaboration will accelerate AI technology advancement and provide new impetus for global economic growth.