BlackRock (BLK.N) and Microsoft (MSFT.O) intend to form a more than $30 billion fund to invest in artificial intelligence infrastructure for data centers and energy projects, the companies announced Tuesday.
Microsoft and BlackRock are part of a group of companies working together to raise up to $100 billion for the development of artificial intelligence data centers and the energy infrastructure to support them.
The companies are part of the Global Artificial Intelligence Infrastructure Investment Partnership, or GAIIP, as stated in a press release on Tuesday. The other participants are Global Infrastructure Partners, or GIP, an infrastructure investor being bought by BlackRock, and MGX, a technology investor based in the UAE.
“We are committed to ensuring AI helps advance innovation and drives growth across every sector of the economy,” said Microsoft CEO Satya Nadella, in a statement. He said the initiative brings “together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way.”
The group plans to raise $30 billion in initial capital, with the ultimate goal of raising up to $100 billion, including through debt financing.
Tech companies have been racing to build data centers brimming with Nvidia graphics processing units, or GPUs, capable of running generative AI models like OpenAI’s ChatGPT chatbot. These GPUs require a lot of power, and rising demand has created a bottleneck for establishing additional facilities.
Microsoft’s investment adds to the capital expenditures required to enable infrastructure expansion for its Azure public cloud, which serves OpenAI and other AI customers. In July, Microsoft said its fiscal fourth-quarter capital spending, including assets bought through finance leases, reached $19 billion.
BlackRock announced in January that it will acquire GIP for $3 billion in cash and about 12 million shares of BlackRock common stock. Last week, BlackRock stated that the transaction is expected to be finalized on October 1.
MGX was founded in March by Mubadala of Abu Dhabi and G42, an artificial intelligence company.
AI models, particularly those used for deep learning and large-scale data processing, demand significant computational power, which increases energy consumption.
The computational requirements for AI have required tech companies to connect together thousands of chips in clusters to reach the requisite amount of data crunching power, resulting in an increase in demand for these specialized data centers.
BlackRock and Microsoft announced that the Global AI Infrastructure Investment Partnership will help improve AI supply chains and energy sourcing.
The fund’s general partner will be MGX, an Abu Dhabi-backed investment company, while AI chip firm Nvidia (NVDA.O) will supply expertise.
According to the companies, the partnership has the potential to mobilize up to $100 billion in total investment, including debt financing.
According to the companies, the majority of the investments will be made in the United States, with the remainder going to partner countries.