BlackRock, Microsoft and the Abu Dhabi-backed investment entity MGX have unveiled plans to launch one of the largest AI-focused investment funds in history. This venture, with an initial capital commitment exceeding $30 billion.
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BlackRock is teaming up with Microsoft for its advancements in cloud computing and AI and MGX, an investment vehicle backed by Abu Dhabi.
The primary aim of the fund is to address the burgeoning demand for AI technologies by investing in the infrastructure needed to support them. This includes the development of data centers and the necessary energy infrastructure.
The fund is set to raise $30 billion with the potential to scale up to $100 billion over time. This expansion will involve both equity and debt financing to support various infrastructure projects.
Central to the initiative is the creation and enhancement of data centers, which are critical for hosting and processing the vast amounts of data required by AI systems.
Given the huge energy demands of AI technologies, a huge portion of the funds will be directed towards developing energy infrastructure including renewable energy sources.
BlackRock will lead the initiative. The company acquired Global Infrastructure Partners (GIP) for $12.5 billion, which will now function as BlackRock’s infrastructure investment unit.
Microsoft is deeply invested in AI, having already committed $13 billion to AI research through its partnership with OpenAI.
MGX is a newly established investment entity backed by Abu Dhabi, focused on AI investments. Its role is crucial in channeling funds and resources towards the development of AI infrastructure in the UAE and beyond.
NVIDIA will contribute its expertise in AI technology and energy-efficient solutions to support the development of AI data centers.
The initiative is expected to impact the global infrastructure providing the necessary support for the rapid expansion of AI technologies. This includes the construction of new data centers and upgrades to existing facilities.
AI data centers are projected to increase electricity consumption up to tenfold by 2030. This surge in energy needs is driving investment in both traditional and renewable energy sources to ensure sustainable operations.
While the fund has a global scope, there will be a specific focus on expanding infrastructure in the US and the UAE.
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BlackRock’s acquisition of GIP for $12.5 billion is a move to bolster its infrastructure investment capabilities. GIP’s expertise in managing large-scale infrastructure projects complements BlackRock’s investment strategy.
The fund’s goal of reaching up to $100 billion will involve debt financing, in addition to equity contributions. This approach will provide the financial flexibility needed to support infrastructure development.
The GAIIP aims to mobilize $30 billion in private equity capital with the potential to leverage this amount to up to $100 billion when including debt financing.
As one of the world’s largest asset management firms, BlackRock brings its extensive network of corporate relationships and investment expertise.
Global Infrastructure Partners (GIP) specializing in investing in large-scale infrastructure assets, GIP will leverage its experience in owning and operating complex infrastructure projects.
Bayo Ogunlesi, Chairman and CEO of GIP, addressed the need to mobilize private capital to meet the infrastructure demands of AI.
Microsoft, led by Chairman and CEO Satya Nadella will provide funding and also its technological expertise.
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