BlackRock forecasts that the surge in artificial intelligence (AI) and the growth of data centers will lead to a 50% increase in energy consumption across the Asia Pacific region in the next decade. This prediction was made by a senior executive at the world’s largest asset manager during a media briefing on Wednesday.
Brad Kim, BlackRock’s managing director for global infrastructure funds in Asia Pacific, stated that the demand for data centers is expected to double in the next five years compared to current levels. He emphasized that overall energy consumption in the region will rise significantly, estimating a 50% increase over the next ten years.
As energy demand climbs, technology companies are securing long-term power contracts in Asia. This trend is driven by the need for data centers and the expansion of AI technologies. Last month, Microsoft took a proactive step by signing a contract to purchase all the solar power from a new project in Singapore. This aligns with Microsoft’s goal to match 100% of its electricity usage with zero-carbon energy purchases by 2030.
The agreement involves EDP Renewables, a company based in Spain, which will supply Microsoft with 100% of the renewable energy generated by its SolarNova 8 project in Singapore.
According to BlackRock, Asia presents significant investment opportunities in infrastructure, particularly in energy, as the AI boom progresses. Charlie Reid, head of APAC renewable power investments at BlackRock, noted that there is a growing interest among clients to invest in energy transition and digital infrastructure.
Earlier this month, BlackRock, alongside Global Infrastructure Partners, Microsoft, and MGX, formed a new partnership focused on investing in data centers and enhancing power infrastructure. This partnership aims to unlock $30 billion in private equity capital from various investors, which could lead to a total investment potential of up to $100 billion, including debt financing.
Larry Fink, Chairman and CEO of BlackRock, stated, “Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multi-trillion-dollar long-term investment opportunity.”
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