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Microsoft in $30bn partnership to build AI data centres

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 18 Sep 2024
Microsoft is planning to build out its cloud infrastructure in new areas across South Africa.
Microsoft is planning to build out its cloud infrastructure in new areas across South Africa.

US-based software giant Microsoft has entered a $30 billion partnership to invest in artificial intelligence (AI) infrastructure.

The company, which already backs AI-based start-up companies such as OpenAI, believes the drive to develop more powerful AI capabilities will require significant infrastructure investment to support it.

Yesterday, BlackRock, Global Infrastructure Partners (GIP), Microsoft, and MGX announced the Global AI Infrastructure Investment Partnership (GAIIP) to make investments in new and expanded data centres to meet growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities.

These infrastructure investments will be chiefly in the US fuelling AI innovation and economic growth, and the remainder will be invested in US partner countries, Microsoft says in a statement.

Microsoft initially invested in data centres infrastructure South Africa in 2019. The company recently indicated that it aims to build out its cloud infrastructure in new areas across South Africa, to meet the growing demand from public and private sector organisations for cloud and AI services and solutions in Africa.

Globally, most technology companies are making significant investments in AI, which is seen as a foundational technology for future innovation.

Companies like Google, Microsoft, and Amazon are investing heavily to develop cutting-edge AI models, which can unlock new applications in various fields such as healthcare, autonomous vehicles, and advanced robotics.

New research from IDC predicts that business spending to adopt AI, to use AI in existing business operations, and to deliver better products/services to business and consumer customers will have a cumulative global economic impact of $19.9 trillion through 2030 and drive 3.5% of global GDP in 2030.

The Microsoft partnership will support an open architecture and broad ecosystem, providing access on a non-exclusive basis for a diverse range of partners and companies.

Nvdia will support GAIIP, offering its expertise in AI data centres and AI factories to benefit the AI ecosystem.

GAIIP will also actively engage with industry leaders to help enhance AI supply chains and energy sourcing for the benefit of its customers and the industry.

According to Microsoft, the partnership will initially seek to unlock $30 billion of private equity capital over time from investors, asset owners, corporates, which in turn will mobilise up to $100 billion in total investment potential when including debt financing.

It adds that the founders of the partnership bring together leading global investors BlackRock, GIP, and MGX, an AI and advanced technology investor, with funding as well as expertise from Microsoft.

GAIIP combines deep understanding of infrastructure and technology to drive efficient scaling of data centres, with energy, power, and decarbonisation investment capabilities for related enabling infrastructure for AI.

His Highness Sheikh Tahnoon bin Zayed Al Nahyan, chairman of MGX, emphasises the importance of AI for the future of our economies: “Artificial intelligence is not just an industry of the future, it underpins the future.

“Through this unique partnership, we will enable faster innovation, technological breakthroughs and transformational productivity gains across the global economy. The investments we make today will secure a more sustainable, prosperous and equitable future for all mankind.”

“Mobilising private capital to build AI infrastructure like data centres and power will unlock a multi-trillion-dollar long-term investment opportunity,” says Larry Fink, chairman and CEO 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.”

“We are committed to ensuring AI helps advance innovation and drives growth across every sector of the economy,” says Satya Nadella, chairman and CEO of Microsoft.

“The Global AI Infrastructure Investment Partnership will help us deliver on this vision, as we bring together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way.”

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