Microsoft, BlackRock join hands to raise $100 billion for AI data centers

Microsoft and BlackRock have partnered to amass $100 billion in funds for the development and expansion of data centers to support AI growth and the energy infrastructure needed to power these facilities.

According to a press release, the companies are part of the Global Artificial Intelligence Infrastructure Investment Partnership, or GAIIP, that seeks to address the growing demand for AI-powered data centers and sustainable energy infrastructure.

The partnership also includes Global Infrastructure Partners (GIP), an infrastructure investor soon to be part of BlackRock, and MGX, a tech investor in the United Arab Emirates.

With financial heavyweights and industry experts under one roof, GAIIP seeks to plug the funding gap for AI infrastructure development with an initial target of $30 billion in private equity capital and a long-term goal of $100 billion, according to the statement.

"We are committed to ensuring AI helps advance innovation and drives growth across every sector of the economy," Microsoft CEO Satya Nadella said in a statement. He added that the initiative brings "together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way."

Microsoft has invested significantly in artificial intelligence, including more than $10 billion into OpenAI, the company behind ChatGPT. Microsoft revealed in July that its capital expenditures for the fourth quarter of the fiscal year, including assets acquired through financing leases, totaled $19 billion.

"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. He added that the financial partnership will help advance technology, national competitiveness, security, and economic prosperity.

The primary focus of the partnership will be funding data center development and new power sources within the United States, with the remaining investments planned for partner countries. Nvidia, the top producer of AI chips, will support GAIIP, offering its expertise in AI data centers and AI factories to benefit the AI ecosystem, according to the release.

Larry Fink, Chairman and CEO of BlackRock, said that "mobilizing private capital to build AI infrastructure like data centers and power will unlock a multi-trillion-dollar long-term investment opportunity."

Earlier this year, BlackRock announced its plans to acquire GIP for $3 billion in cash and about 12 million shares of BlackRock common stock. It said last week that the deal is expected to close on Oct. 1.