BlackRock, GIP, Microsoft, MGX in $100B Deal to Invest in Data Centres, AI Infrastructure

BlackRock, Global Infrastructure Partners (GIP), Microsoft, and Abu Dhabi state-backed artificial intelligence investment firm MGX have formed a partnership that will invest in AI related infrastructure, with a total investment potential of up to $100 billion to deploy into data centres and energy sources to meet growing demand for computing power.

The Global AI Infrastructure Investment Partnership (GAIIP) will make investments primarily in the US, while a portion will be invested in unspecified US partner countries, according to a joint announcement by the partners on Tuesday. The partners will initially seek $30 billion in private equity capital from investors, asset owners, and corporates, while targeting a total investment potential of up to $100 billion including debt financing.

“Mobilising private capital to build AI infrastructure like data centres and power will unlock a multi-trillion-dollar long-term investment opportunity,” said BlackRock chairman and CEO Larry Fink. “Data centres are the bedrock of the digital economy, and these investments will help power economic growth, create jobs, and drive AI technology innovation.”

GAIIP, which will invest in new and expanded data centres, as well as energy infrastructure to create new sources of power for those facilities, will also work with semiconductor giant Nvidia for expertise on design and integration of AI data centres for the partnership and its portfolio companies.

Investor Heavyweights

The partnership will support an open architecture for its projects, providing full access on a non-exclusive basis for a diverse range of partners and companies, and will actively engage with industry leaders to help enhance AI supply chains and energy sourcing, according to the partners.

“There is a clear need to mobilise significant amounts of private capital to fund investments in essential infrastructure,” said GIP chairman and CEO Bayo Ogunlesi. “One manifestation of this is the capital required to support the development of AI. We are highly confident that the combined capabilities of our partnership will help accelerate the pace of investments in AI-related infrastructure.”

New York-based GIP, which manages around $115 billion in assets, is set to become part of BlackRock after the company agreed in January to a $12.5 billion buyout by the world’s largest asset manager. BlackRock announced last week that it expects the acquisition to close on 1 October.

MGX was established in March with backing from Abu Dhabi sovereign fund Mubadala Investment Company and Abu Dhabi-based tech investment firm G42 to invest in AI infrastructure, semiconductors, and AI-enabled technologies and applications.

“Building the necessary infrastructure required to advance and accelerate the adoption of AI will reshape and revitalise almost every aspect of how we live,” said MGX CEO Ahmed Yahia Al Idrissi. “Similar to our transportation infrastructure, new data centres and power sources will enable growth and commerce in the future innovation economy.”

Microsoft, which will provide funding and expertise to GAIIP, pointed to the partnership as enhancing American competitiveness in AI and fueling economic growth.

“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 Microsoft vice chair and president Brad Smith. “This financial partnership will not only help advance technology, but enhance national competitiveness, security, and economic prosperity.”

Investors Pile In

GAIIP’s backers join a growing list of global investors deploying capital into data centre assets as cloud adoption, data consumption and investment in AI boost demand for digital infrastructure.

Earlier this month, US private equity titan Blackstone and the Canada Pension Plan Investment Board (CPPIB) agreed to buy Australia’s AirTrunk from a consortium led by Aussie finance giant Macquarie in a deal valuing the data centre company at A$24 billion ($16.1 billion). Should the acquisition be approved by regulators, the deal would mark Blackstone’s largest-ever investment in the Asia Pacific region and the fifth-largest takeover of an Australian company.

Princeton Digital Group, a Singapore-based data centre operator backed by Warburg Pincus, Mubadala, and Ontario Teachers’ Pension Plan Board, is reported to be considering a private fundraising round to raise as much as $1 billion. The company plans to double the capacity of its data centres in three years to meet surging demand from AI developers.

In June, KKR and Singapore telecom operator Singtel agreed to invest as much as $2.2 billion for up to an 18.3 percent combined stake in Singapore-based data centre platform ST Telemedia Global Data Centres.

During that same month, KKR and GIP announced the creation of a coalition to promote infrastructure investment in emerging-market economies of the Indo-Pacific Economic Framework, with an initial focus on scaled infrastructure investments in the digital sector, as well as energy, transport, water and waste.