The Investment Group GAIIP Wants to Mobilize up to $100 Billion! BlackRock, Microsoft and Nvidia Invest in AI Data Centers and Energy Infrastructure
BlackRock (BLK) and Microsoft (MSFT) are part of a group of companies that will set up an investment fund for artificial intelligence. The fund is expected to mobilize up to $100 billion for the development and construction of data centers and their energy infrastructure, and these funds will be invested primarily in the US and its partner countries to meet the growing demand for AI and stimulate economic growth.
On Tuesday, September 17, 2024, the companies announced that they will be part of a newly formed partnership called GAIIP Global AI Infrastructure Investment Partnership. The other participants are Global Infrastructure Partners (GIP), an infrastructure investor that will be fully acquired by BlackRock for $3 billion in cash and approximately 12 million BlackRock common shares by October 1, 2024, and MGX, a technology investor based in the United Arab Emirates. MGX was established in March by founding partners Mubadala from Abu Dhabi and AI company G42.
"We are committed to ensuring that AI drives innovation and fosters growth across all sectors of the economy," said Microsoft CEO Satya Nadella in the statement. "The Global AI Infrastructure Investment Partnership will help us realize this vision as we bring together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way."
Nvidia (NVDA) will provide GAIIP with its expertise in AI data centers and AI factories.
"Accelerated computing and generative AI are driving a growing need for AI infrastructure for the next industrial revolution," said Jensen Huang, founder and CEO of Nvidia. "Nvidia will leverage its expertise as a full-stack computing platform to help GAIIP and its portfolio companies develop and integrate AI factories to drive industry innovation."
The partnership will initially raise $30 billion in private equity capital from investors, asset owners and corporations, which could raise up to $100 billion in total investment potential when debt financing is included, according to Blackrock.
"Mobilizing private capital to build AI infrastructure such as data centers and power will open up a multi-trillion dollar long-term investment opportunity," said Larry Fink. $," said Larry Fink, Chairman and CEO of BlackRock. "Data centers are the foundation of the digital economy, and these investments will fuel economic growth, create jobs and drive innovation in AI technology."
Technology companies are racing to build data centers full of graphics processing units (GPUs) from Nvidia that can run generative AI models and enable OpenAI's chatbot ChatGPT, for example. However, the pursuit of more powerful AI capabilities requires significant infrastructure investment, as these GPUs consume a lot of power and increasing demand has led to a bottleneck in building new facilities for power generation.
Microsoft's investment is in addition to the investment already made to expand the infrastructure of its Azure public cloud, which powers OpenAI and other AI customers. Microsoft announced back in July that its Q4 fiscal year capital expenditures, including assets acquired under capital leases, totaled $19 billion.
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