BlackRock and Microsoft launch $30bn AI infrastructure investment partnership
BlackRock and Microsoft have launched a $30bn artificial intelligence (AI) infrastructure investment fund to build data centres and energy projects to meet the growing demand of AI.
The partnership between BlackRock’s infrastructure investment unit Global Infrastructure Partners (GIP), Microsoft and Abu Dhabi technology investment firm MGX will initially seek $30bn of private equity investments. Using leverage, it aims to attract up to $100bn in total investment capacity including debt financing.
The fund is the latest vehicle launched aiming to tackle the large power and digital infrastructure demand of using and building AI products, with the biggest threat to AI datacentres being electrical power.
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Latest research shows that the amount of electricity consumed by AI is forecast to exceed 85 terawatt hours annually within a couple of years, calling in to question whether the current energy infrastructure can support the need.
“Mobilising private capital to build AI infrastructure like data centres and power will unlock a multi-trillion-dollar long-term investment opportunity,” said Larry Fink, chairman and CEO of BlackRock.
The partnership comes as the emissions output of the infrastructure behind AI has started to threaten climate goals of Microsoft, with the company’s emission rising by almost a third since 2020.
Earlier this year, Microsoft agreed to back $10bn in renewable energy projects built by Canada’s Brookfield Asset Management, with the company making a commitment to ensure 100% of its energy consumption is matched by zero carbon energy purchases by 2030.
“The capital spending needed for AI infrastructure and the new energy to power it goes beyond what any single company or government can finance,” said Brad Smith, vice chair and president of Microsoft.
“This financial partnership will not only help advance technology, but enhance national competitiveness, security, and economic prosperity,” Smith added.
Microsoft had announced four years ago that it intended to be carbon negative by the end of the decade, however, the stark increase in energy consumption due to the AI is throwing a spanner in the works of its ambitious decarbonisation targets. But in this year's Environmental Sustainability Report, the company acknowledged that its emissions have increased by almost a third from the 2020 baseline.
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