Microsoft Corp and BlackRock have teamed up as one of three core members in a consortium to be formed seeking to raise as much as $100 billion in funding to build infrastructure needed to power artificial intelligence. Microsoft, along with its two partners, unveiled the venture known as Global Artificial Intelligence Infrastructure Investment Partnership on Tuesday. Among others, other important players include Global Infrastructure Partners acquired by BlackRock- the world’s biggest infrastructure investor-and MGX, a UAE-based tech investor.
The company will begin with the initial capital increased to $30 billion but then looks forward to raising as high as $100 billion, and which also includes debt financing. Confirming the new approach, Microsoft CEO Satya Nadella said that the effort focuses on spurring innovation in and outside many sectors through the unification of finance leaders and industry leaders for developing sustainable infrastructure for the future.
The immediate breakthroughs on generative models, such as the type used to power ChatGPT by OpenAI, have resulted in a virtual horse race among tech companies attempting to rapidly develop AI-specific data centers. These centers rely heavily on Nvidia’s graphics processing units because they’re consumed heavily for running complex AI models, though they constitute significant energy guzzlers. “It really is a demand-driven growth path, but it also creates a bottleneck in terms of its expansion into the rest of the infrastructure needed to support these advanced AI technologies,” said SawyerBrown of Verne Global, an otherwise typical run-of-the-mill rural Icelandic facility developing into a powerhouse of data centers.
In addition to the investments Microsoft has already been making in its Azure public cloud infrastructure-on which base services OpenAI and other AI customers benefit-Microsoft is devoting more resources to this endeavor. Capital expenditures for fiscal fourth-quarter 2022, including assets acquired under finance leases, were $19 billion, the company said last month in its July quarterly earnings report.
For BlackRock, this is its procurement of GIP, a $3 billion deal including cash and about 12 million shares of BlackRock common stock. The deal is likely to close on October 1. MGX is a new player, launched in March with backing from Abu Dhabi’s Mubadala and AI firm G42.
With GAIIP, Microsoft BlackRock, and their partners will attempt to meet the increasing global demand for AI infrastructure, making sure the future development is scalable and sustainable while putting them in the best position to be first in the AI revolution.
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