BlackRock and Microsoft are planning to launch a fund of over $30 billion that would invest in artificial intelligence infrastructure for building data centers and energy projects, Bloomberg reports. The investment vehicle, known as Global AI Infrastructure Investment Partnership, aims to support the development of AI supply chains and energy infrastructure. Meanwhile, it has been revealed that artificial intelligence is projected to increase energy demand by 50 percent in Asia, which could have significant implications for Europe as well.
The growing demand for AI and data centers in the Asian region could pose a technological competitive disadvantage for Europe. The advancement of AI technologies and the infrastructure of data centers are closely linked to economic growth, and countries that are able to allocate significant resources to develop these areas can gain long-term economic advantages.
BlackRock expects that the energy consumption in the Asian and Pacific region will increase by 50 percent in the next decade due to the AI boom and the rapid expansion of data centers. “The demand for data centers in the markets will double in the next five years,” said Brad Kim, BlackRock’s Managing Director responsible for global infrastructure funds in Asia-Pacific. He added that the “total energy consumption will increase by about 50 percent in the next 10 years in the Asian and Pacific region.”
Technology giants have already begun securing long-term energy contracts in Asia, where the demand for data centers and AI development is growing, leading to a greater increase in electricity and overall energy demand than previously expected. Last month, Microsoft signed a contract for the full-day energy purchase of a Singaporean project as the tech giant aims to achieve its goal of covering its entire power consumption with 100 percent carbon-free energy purchases by 2030. Microsoft has reached an agreement with the Spanish-based EDP Renewables to purchase 100 percent of the renewable energy exported from the SolarNova 8 project in Singapore.
“BlackRock believes Asia will offer huge opportunities for infrastructure investments, including energy infrastructure. Particularly now, as the artificial intelligence boom is unfolding,” said Larry Fink, CEO of BlackRock.
In early September, BlackRock, Global Infrastructure Partners, Microsoft, and MGX launched a new AI partnership to invest in data centers and support energy infrastructure. The partnership initially aims to mobilize about $30 billion in private capital from investors, asset owners, and companies, which could potentially mobilize up to $100 billion in total investment potential when considering debt financing as well.
“The mobilization of private capital for the development of artificial intelligence infrastructure, such as data centers and energy supply, will unlock multi-billion dollar long-term investment opportunities,” said Larry Fink.
As the energy demand in Asia and the Pacific region drastically increases, it raises the global demand for raw materials such as natural gas, coal, and rare earth metals needed for operating electrical grids, which could generate further price hikes. This situation also negatively impacts supply security. Europe has been striving to reduce its dependence on fossil fuels, especially Russian natural gas, over the past decade. However, procurement of alternative energy sources (such as LNG imported from Qatar and the United States) could become more expensive if the growing demand in the Asian region creates additional competition for these resources.
Europe is already competing with the United States and China in AI development, and if the region’s energy consumption and infrastructure cannot keep up with global trends, the continent may fall further behind. Several EU member states are already working on increasing energy efficiency and expanding digital infrastructures. The projected increase in energy demand by BlackRock poses economic challenges, as AI-based economic growth and the construction of data centers are highly energy-intensive sectors.
