Microsoft and BlackRock want to raise $100 billion to ‘emancipate themselves from the shackles’ of insufficient power and increase data centers for their ambitious AI dreams
Microsoft teams up with BlackRock to raise $100 billion to meet their data center and power needs for AI advances.
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What you need to know
Did you knowGoogle and Microsoft consume more power than 100 countries? Generative AI’selectricityandcooling waterdemand is at an all-time high. Experts and researchers say the world might be on the brink of the most significant technological breakthrough with AI, butthere won’t be enough electricity to power its advances by 2025.
Key players in the AI landscape, like OpenAI and Microsoft, have openly been seeking alternative power sources, includingnuclear fusion, to ensure their advances and efforts in the category aren’t watered down due to a lack of enough power. As it happens,Microsoft and BlackRock have partnered to raise $30 billion to develop data centers for their AI venturesand the energy infrastructure to power them.
For context, Microsoft and BlackRock are part of the Global Artificial Intelligence Infrastructure Investment Partnership (GAIIP) alongside other Global Infrastructure Partners (GIP), which specialize in investing in, owning, and operating some of the largest assets in energy, transport, digital infrastructure, and more.
GAIIP aims to raise $30 billion of private equity capital, which could help the group leverage up to $100 billion from investors, including debt financing. In an interview, BlackRock CEO Larry Fink indicated:
“The need to build out data centers globally is multi-trillions of dollars to finance. This is just a great example of the capital markets building out infrastructure and building out the opportunities and new technologies.”
Microsoft CEO Satya Nadella says the initiative will expedite the process of pulling resources required to “build the infrastructure of the future and power it in a sustainable way.” “We are committed to ensuring AI helps advance innovation and drives growth across every sector of the economy,” Nadella added.
Lack of sufficient power continues to cripple in AI advances
Recently, most companies dabbling in the AI landscape have openly shown interest in making their efforts more sustainable, affordable, and environmentally friendly. Part of this process includes developing massive data centers that can be used to train and improve the capabilities of their AI-powered offerings.
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This has resulted in a high demand for GPUs from NVIDIA. As it seems, the chip maker is reportedly facing a supply-and-demand problem. According toleaked emails between Elon Musk and NVIDIA, the billionaire asked the chipmaker to prioritize processor shipments to X and xAI ahead of Tesla due to the shortage of AI chips.
On the same topic, Elon Musk debutedxAI’s Colossus project, which was developed in under 122 days. It’s reportedlythe most powerful AI training system in the world, powered by 100K NVIDIA H100 GPUs, and it trains Grok to become the most powerful AI by every metric.
Elsewhere,Microsoft and OpenAI invested $100 billion in a project dubbed Stargateto free themselves from the shackles and overreliance on NVIDIA for AI chips; the data center is expected to launch in 2028 and will help meet the companies' high demand for GPUs. Investors have startedflagging issues with Microsoft’s exorbitant expenditure on AI projects, as there are minimal returns to show in terms of profit.
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Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You’ll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.
