American investment firm BlackRock is gearing up to launch an AI-focused fund of over $30 billion in collaboration with Microsoft and the Abu Dhabi-backed investment outfit MGX, as per FT. The AI chip firm Nvidia will provide its expertise in this sector.
The cooperation is said to have the potential to mobilise up to $100 billion in total investment when loan funding is included, as per BlackRock and Microsoft.
What challenge does it address?
Addressing the AI energy issue is one of the most critical challenges faced by the industry now. According to a Goldman Sachs report earlier this year, data centers worldwide currently consume 1-2% of overall power, but this percentage could rise to 3-4% by 2029. This increase is due in no small part to the ongoing growth of power-hungry AI services. A ChatGPT query needs nearly 10 times as much electricity to process as a Google search, the report said.
Reportedly, the US Department of Energy (DOE) has partnered with data centre experts to address the escalating energy needs of AI and digital infrastructure.
What will the fund do?
The investment vehicle, known as the Global AI Infrastructure Investment Partnership, aims to enhance AI supply chains and energy sourcing. This fund will focus on investing in artificial intelligence infrastructure to construct data centres and energy projects. AI models demand huge amounts of processing power, which increases energy consumption, particularly when it comes to deep learning and large-scale data processing.
As these specialised data centers has surged as a result of IT businesses having to connect together thousands of chips in clusters to reach the necessary amount of computing power for AI.
While a majority of the investments will be made in the United States, the remaining portion going to its partner nations.
