Tens of billions of private dollars could soon flow into the U.S. data center industry — and the energy infrastructure backing it.
A coalition of major asset managers and technology companies announced on Tuesday it has launched the Global AI Infrastructure Investment Partnership, an artificial intelligence-focused partnership to “invest in data centers and supporting power infrastructure.”
The partnership is led by BlackRock, Global Infrastructure Partners, Microsoft, and MGX, an AI investment vehicle with sovereign wealth fund Mubadala and AI firm G42 as its foundational partners, while leaning on NVIDIA for technical expertise.
It seeks to raise $30 billion in private equity, a sum that rivals some of the largest closed-ended private equity funds out there and could unlock as much as $100 billion in investment potential when including debt financing, according to the coalition members.
The announcement comes a few weeks after Bloomberg reported that OpenAI CEO Sam Altman is also working to build a coalition of global investors to build infrastructure supporting AI, starting from the U.S. It’s not clear yet whether these two efforts are connected. But regardless, they both constitute billions going not only toward new and expanded data centers, but toward the energy infrastructure necessary to support them as well.
How will energy play a role?
The focus on energy infrastructure signals a shift in focus when it comes to the main challenge to AI development: one year ago, people were concerned about access to chips; now, they’re concerned about access to energy.
Data centers supporting AI are increasingly hungry for energy, and the power they need is expected to grow from roughly 4% of current US power demand to up to 12% in 2030, according to a new report by McKinsey. (Goldman Sachs puts that number at 8% by 2030.)
The rise of large GPU clusters will contribute to the increase in electricity demand, taxing an already-constrained grid with a massive interconnection backlog for new renewable energy projects. Goldman found that demand for power center power is expected to surge by 160% by 2030.
Even a fraction of that $100 billion would be a help to the grid — but Brian Janous, co-founder of Cloverleaf Infrastructure, a company that helps utilities unlock grid capacity, said that its impact depends on what kind of infrastructure it supports.
“If you throw capital at it with the wrong strategy, you’re not going to get the outcome that you want,” Janous told Latitude Media. “My fear is that big tech companies think their approach has to be brute force, like building one mega-campus.”
Investors should instead focus on making the grid more robust, he added.
Meeting the grid is where it’s at
The Global AI Infrastructure Investment Partnership announcement does not offer any details on the kind of energy infrastructure that might be a target.. Microsoft and MGX declined to comment on the energy infrastructure investment they plan on pursuing, while BlackRock and Global Infrastructure Partners did not respond to a request for comment.
Top tech leaders have an obsession with breakthrough technologies that promise to provide clean firm power. OpenAI’s Altman, for example, is betting on both advanced nuclear and startups like Exowatt, which promises a “groundbreaking modular energy system.”
But those are distant — and still unproven — technologies. Traditional infrastructure players like BlackRock and Global Infrastructure Partners have decades of experience investing in lower-risk generation assets. And, experts say, the grid needs an upgrade right now.
As McKinsey’s report notes, “power unavailability in most markets is driven by limitations in interconnecting to the transmission grid, rather than an inability to generate the power.”
Tony Lenoir, senior analyst for energy research at S&P Global Commodity Insights, told Latitude Media that renewable energy is being actively deployed and contracted by hyperscalers, with about 292 gigawatts of solar, wind, and battery storage capacity already installed in the U.S., and 610 more planned.
“But you need the grid infrastructure to transmit the renewable energy that’s going to be produced,” he said. “That is one area where all of that money could come into play, because a lot of regions need to upgrade or expand transmission infrastructure. Transmission really is a bottleneck at the moment.”
Janous, who’s working to solve that bottleneck with his company, agrees. The best strategy, he said, is to leave the energy breakthroughs for long-term goals, and focus on the short-term — investing in grid expansion and transmission, storage projects, and dynamic line rating.
“There seems to be a tendency in the tech industry to think you can bypass the electric grid and build nuclear plants to run everything,” he said. “It’s a tendency to think you can do this without relying on utilities, because they’re slow, and dumb, and dinosaurs. When in fact, utilities and grid operators are essential for meeting the needs of the industry.”
