Microsoft and BlackRock to launch $30 billion fund to invest in AI infrastructure

BlackRock and Microsoft are planning to launch an over $30 billion fund to invest in artificial intelligence infrastructure to build data centers and energy projects, the companies said on Tuesday.

According to the announcement, the initiative will address the immense power and digital infrastructure challenges AI development is expected to encounter as it scales. AI’s demand for computing power far outpaces earlier technologies, straining existing energy grids.

Called the Global AI Infrastructure Investment Partnership, the project is set to raise up to $30 billion in equity investments, along with up to $70 billion in additional debt financing. BlackRock and Microsoft noted the goal is to improve AI supply chains and energy sourcing.

MGX, backed by Abu Dhabi, will act as a general partner in the fund, while Nvidia, a leader in AI chips, will offer its expertise. Altogether, the partnership has the potential to mobilize up to $100 billion when debt financing is factored in.

While most investments will be made in the U.S., partner countries will also see significant funding. According to the Financial Times, this fund, managed by BlackRock’s new infrastructure investment arm, Global Infrastructure Partners, could become one of the largest investment vehicles ever launched on Wall Street.

“The financial partnership, which BlackRock is launching with its new infrastructure investment unit, Global Infrastructure Partners, would be one of the biggest investment vehicles ever raised on Wall Street. Microsoft and MGX, the Abu Dhabi-backed investment company, are general partners in the fund. Nvidia, the fast-growing chipmaker, will advise on factory design and integration, the Financial Times reported.

The fund will be GIP’s first major venture since the private infrastructure investment group reached a $12.5 billion acquisition agreement with BlackRock earlier this year. The acquisition is set to be finalized in October.

Since ChatGPT’s introduction in 2022, AI models, particularly those used in deep learning and large-scale data tasks, have driven up energy usage. The need for more advanced computing power has forced companies to link thousands of chips together in specialized data centers, pushing the demand for these facilities to new heights.