Abu Dhabi's MGX teams up with BlackRock and Microsoft to raise up to $100bn for AI infrastructure

Abu Dhabi-based technology company MGX , BlackRock, Microsoft and Global Infrastructure Partners have launched an artificial intelligence infrastructure investment partnership that aims to mobilise up to $100 billion to enhance the future of AI. Initially, the Global AI Infrastructure Investment Partnership plans to secure $30 billion in private equity from investors, asset owners, and companies, which will grow to $100 billion in total investment with the inclusion of debt financing. The partnership will create an open architecture ecosystem, offering access to a wide range of partners and companies on a non-exclusive basis. The partnership intends to develop new data centres as well as increase the capabilities of existing centres in the US and partner countries, the entities said on Wednesday. It will also address the growing demand for computing power and support decarbonisation efforts for the critical infrastructure needed for AI while developing energy solutions to generate new power sources for data centres. “We will enable faster innovation, technological breakthroughs and transformational productivity gains across the global economy,” said Sheikh Tahnoun bin Zayed, Deputy Ruler of Abu Dhabi, National Security Adviser and chairman of MGX. “The investments we make today will secure a more sustainable, prosperous and equitable future for all mankind.” Established in March, MGX aims to expedite the development of AI and other advanced technology as the UAE seeks to enhance its future economy. It focuses on three core areas – AI infrastructure (data centres and connectivity), semiconductors and core technology and applications such as AI models, software, data, life sciences and robotics. Ahmed Al Idrissi, chief executive of MGX, said the partnership will expedite the adoption of AI across industries, with MGX playing a crucial role in this transformation. The initiative will establish Abu Dhabi as one of the leading hubs for AI infrastructure globally, he said. “Installed data centre capacity today exceeds 70 gigawatts. Over the next 10 to 15 years, this number is expected to reach 300 gigawatts. Currently, 1 gigawatt costs about $30 billion to $35 billion, making this level of spending unprecedented in both scope and scale,” Mr Al Idrissi told The National from Washington DC, where he was attending the deal signing ceremony. “Even hyper-scalers today are spending around $200 billion to $250 billion annually on infrastructure, but they can no longer sustain this level of expenditure moving into the next decade. Therefore, we have come together to create an investment vehicle that can help bear some of this burden and offer infrastructure delivery as a service to various players across the market.” A hyper-scaler, for example, Microsoft and Oracle, is a cloud provider that operates a large-scale data centre network to offer computing, storage and other technology services. “Our mandate is to invest in infrastructure, and there is no better partner for that than hyper-scalers, which is why we teamed up with Microsoft. BlackRock, as one of the largest global capital providers, is also a key partner,” Mr Al Idrissi said. “While our objective is to generate strong financial returns, we are also committed to building Abu Dhabi into one of the world’s leading hubs for infrastructure and AI. This partnership allows us to bring the best global expertise to further develop Abu Dhabi’s AI ecosystem.” Global AI industry is growing rapidly. Business spending to adopt AI is expected to have a cumulative global economic impact of $19.9 trillion by 2030 and contribute 3.5 per cent to the global economy by that year, according to an International Data Corporation report. In its latest survey, IDC found about 98 per cent of global business leaders consider AI to be a priority for their organisations. Mobilising private capital to build AI infrastructure will unlock a “multi-trillion-dollar” long-term investment opportunity, said Larry Fink, chairman and chief executive of BlackRock. “Data centres are the bedrock of the digital economy, and these investments will help power economic growth, create jobs, and drive AI technology innovation.” Microsoft, based in Redmond, Washington, announced it would be opening a branch of its AI for Good Lab in Abu Dhabi, its first such centre in the Middle East. Data centres are considered the backbone of AI development because they provide the computing power and storage needed to process vast amounts of data, run complex algorithms, and train AI models. However, powering these centres is very energy-intensive, and in the absence of sustainable energy sources, the environmental effects could be significant. Data centres consumed 7.4 gigawatts of power last year, up 55 per cent from the 4.9 gigawatts in 2022, according to Chicago-based commercial real estate services firm Cushman & Wakefield. Data centres and data transmission networks are responsible for about 1 per cent of energy-related greenhouse gas emissions, according to the International Energy Agency. The investment required for AI infrastructure and the energy to support it exceeds the capacity of any single company or government to fund on their own, said Brad Smith, president of Microsoft. “This financial partnership will not only help advance technology, but enhance national competitiveness, security, and economic prosperity.” GAIIP, with support from chip maker Nvidia, will work to enhance both AI supply chains and energy sourcing. “There is a clear need to mobilise significant amounts of private capital to fund investments in essential infrastructure. One manifestation of this is the capital required to support the development of AI,” said Bayo Ogunlesi, chairman and chief executive of Global Infrastructure Partners. “We are highly confident that the combined capabilities of our partnership will help accelerate the pace of investments in AI-related infrastructure.”

Abu Dhabi's MGX teams up with BlackRock and Microsoft to raise up to $100bn for AI infrastructure

The alliance, which also includes Global Infrastructure Partners, will boost investment in data centres and support power infrastructure