Well, well, well. It looks like Microsoft and BlackRock are forming a superteam, and they’re definitely not playing small ball. No sir, these two masters of the universe are coming together for an absolutely absurd $100 billion partnership to build out the future infrastructure for AI.

(Source: CNBC) 

Why? Well, apparently, it’s no longer enough to just dabble in AI. Now, you've got to be all-in on data centers, power plants, and transmission lines. And if AI is going to keep growing like it has been, it’s going to need more juice than a frat house on Homecoming weekend to friggin do so. 

(Source: Giphy) 

In short, according to reports, Microsoft and BlackRock have teamed up with Global Infrastructure Partners and Abu Dhabi’s MGX to form the Global Artificial Intelligence Infrastructure Investment Partnership. Which is just a fancy name for a group that’s on a mission to fund the critical data centers and energy infrastructure needed to power the AI boom. They’re starting off modest (LOL) with a $30 billion raise, but they’re aiming for $100 billion once they start playing with debt financing.

(Source: Bloomberg) 

The reason? Well, AI is hungry, and it ain’t hungry for snacks. It’s hungry for computing power. All those massive AI models, like our boy ChatGPT, need insane amounts of computing power to train and run. Think sprawling data centers stuffed with Nvidia’s hottest chips and power grids that can keep them chugging along - while training AI models is starting to require more energy than your average residential neighborhood (literally).

(Source: Giphy) 

Of course, as we can all imagine, Satya Nadella, Microsoft’s CEO and the guy who’s quietly turning Microsoft into a next-gen tech overlord, is all-in on “building the tech infrastructure of the damn future”. And he’s not wrong. Microsoft’s Azure cloud business is already burning through billions of AI computing power, and now they’re leaning on private capital to foot the bill for the next wave of AI infrastructure.

(Source: Goldman Sachs) 

Which makes sense, especially since there’s a ton of money to be made in this industry. In fact, BlackRock’s own Larry Fink said it best himself: building AI infrastructure is a "multi-trillion-dollar long-term investment opportunity." Translation: investors are “set” to get rich off this. Suddenly, pension funds and big-money investors are chomping at the bit to throw cash into data centers and power plants, because the returns are looking juicier than a startup unicorn at peak hype.

(Source: DB Energy) 

“Ok, so what about the logistics of all of this potential?”

I’m glad you asked. As we’ve seen, the  AI boom isn’t just about cramming GPUs into warehouses; it’s about powering these absolute units. Data centers are already eating up electricity like it’s candy, and experts are saying that these electrical powerhouses could use up to 9% of U.S. power demand by 2030.. That’s a huge number.

(Source: Reuters) 

Especially considering Nvidia, the current king of AI chips, has hinted that AI’s energy needs could soon rival what’s used to power entire neighborhoods. So clearly, this isn’t just about tech—it’s about energy. And with that comes… you guessed it… environmental concerns. Data centers are notorious for their carbon footprint and water usage, which could make some folks a little uneasy about this massive AI infrastructure buildout.

(Source: Giphy) 

But don’t you worry tree huggers, Microsoft and friends are already on it like ticks on a dog. Sheikh Tahnoon bin Zayed Al Nahyan (MGX’s chairman) has stated this partnership will secure a “more sustainable, prosperous, and equitable future for all mankind.” Now of course, that's all big talk on “eco-friendly” promises, but hey, it’s something.

On the other hand, while building out AI infrastructure is a massive opportunity for companies with deep pockets, it’s also a pretty slick real estate move. Data centers are quickly becoming one of the hottest assets in town. 

(Source: DealPath) 

And while Microsoft’s been sinking $20 billion a year into its own data centers for Azure, this new partnership will allow them to supercharge that investment by tapping into additional centers to leverage. Whereas, Blackrock who is likely to own the property of these computing powerhouses is set to benefit handsomely (think McDonalds and their franchises). 

(Source: QZ) 

Now with that said, the raise to $30 billion is underway, but the bottom line is that it’s clear Microsoft and BlackRock are betting big on AI when the world is starting to question the hype. However, the reality is… hype or no hype… the infrastructure needed to power this revolution is going to cost trillions, and these companies are positioning themselves to own a massive chunk of it.

So in the end, this is a perfect example of selling the shovels in the AI gold rush - and if all goes as planned, Microsoft and BlackRock could be sitting at levels no one could have even imagined.

(Source: Giphy) 

Now in the meantime, only time will tell if this partnership gains steam or not, but regardless keep an eye on this story and both of these companies going forward - as always, stay safe and stay frosty friends! Until next time…

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Stocks.News holds positions in Microsoft and McDonalds as mentioned in the article.