BlackRock, the world’s largest asset manager, is preparing to launch a landmark artificial intelligence (AI) investment fund valued at over $30 billion, in collaboration with technology giant Microsoft, the Financial Times has reported.
With the demand for AI technologies skyrocketing and stretching existing energy resources to their limits, this fund arrives as a timely intervention to meet the growing needs of the next technological age.
But beyond its size, this fund is seen as a bold statement—an ambitious bet on the future of AI infrastructure. The Global AI Investment Partnership isn’t merely about expanding energy capacity; it’s a vision for tomorrow.
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Through this deal, BlackRock’s infrastructure unit, Global Infrastructure Partners (GIP), has joined hands with Microsoft and MGX, an Abu Dhabi-backed investment firm, to tackle one of the most significant challenges of our time: the overwhelming energy consumption of AI. With Nvidia, the chipmaking powerhouse, advising on factory design, this alliance is set to usher in a new era of technological expansion, making it one of Wall Street’s largest-ever investment vehicles.
The evolution of AI has come with energy demands far more than the world’s power grids can handle. Generative AI, in particular, is placing massive strain on data centers, which are now on course to surpass 1,000 terawatt-hours in electricity consumption by 2026, more than doubling their energy usage from just four years ago. This surge is testing global infrastructure like never before.
The International Energy Agency (IEA) has sounded the alarm, projecting a dramatic rise in electricity demand due to data centers. As AI tools grow more advanced and ubiquitous, the energy required to power them could push existing infrastructure to its breaking point. In the U.S. alone, electricity demand has nearly doubled in projections, from 2.6% to 4.7%, driven largely by AI infrastructure needs.
Microsoft, known for its visionary strategies, recognizes this strain and has fully embraced the opportunity to expand renewable energy projects. It recently committed $10 billion to back such projects, and now, through this partnership, it’s going even further. The tech giant aims to match 100% of its energy consumption with zero-carbon energy by 2030. This new fund, with its unprecedented scope, will contribute significantly to that goal, building the data centers and power facilities necessary to keep AI running without jeopardizing the environment.
Larry Fink, BlackRock’s CEO, sees AI infrastructure as not just an opportunity, but an imperative.
“Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multitrillion-dollar long-term investment opportunity,” he says, hinting at the transformative potential of this partnership.
For Fink, this isn’t just about meeting today’s demand but shaping the future economic landscape where AI will dominate.
GIP, now integrated into BlackRock following a $12.5 billion acquisition deal set to close in October, is entering uncharted territory with this new fund. This is its first major foray under BlackRock’s wing, signaling a new chapter in private capital mobilization. The fund is expected to raise $30 billion in equity, leveraging it to attract another $70 billion in debt financing—a staggering total that could change the face of global infrastructure.
Brad Smith, Microsoft’s president, emphasized the magnitude of the challenge ahead, stating that “the country and the world are going to need more capital investment to accelerate the development of the AI infrastructure needed.” His words underscore the urgency with which these investments must be made to keep pace with the rapid growth of AI technology.
Meanwhile, MGX, the Abu Dhabi-backed general partner in this fund, is no stranger to AI ambitions. Backed by Mubadala, one of the world’s largest sovereign wealth funds, MGX was created to position the UAE at the forefront of AI development. As it seeks to invest in the next funding round for OpenAI, MGX’s involvement signals a broader geopolitical investment in AI that goes beyond mere economic considerations.
Jensen Huang, Nvidia’s visionary founder, puts it succinctly: “Accelerated computing and generative AI are driving a growing need for AI infrastructure for the next industrial revolution.”
His words speak to the seismic shift AI is bringing, not just to tech, but to industries across the board. It’s not just about smarter algorithms and faster processors; it’s about entire sectors—finance, healthcare, manufacturing—being redefined by AI, and all of them need power.
The urgency for such infrastructure investments has been demonstrated in the past. In 2017, Blackstone launched a $40 billion infrastructure fund in partnership with Saudi Arabia, and just last year, Brookfield Asset Management raised $28 billion for what was at the time the largest infrastructure fund in history.
But those initiatives pale in comparison to the demands AI is placing on the grid now. The $30 billion fund BlackRock is launching could set new records, but more importantly, it could pave the way for a future where AI can thrive without overwhelming our energy systems.
“There is a clear need to mobilize significant amounts of private capital to fund investments in essential infrastructure,” Bayo Ogunlesi, GIP’s CEO, said.
This fund is believed to be a necessary evolution in sustaining AI’s future—through massive, sustained investment in the energy and digital grids that will support it.