BlackRock sees huge growth opportunities in Asia for infrastructure to support a boom in artificial intelligence (AI) that’s also spurring energy and water demand.
“The need for data centers over the next five years is going to be double what is currently in the markets,” Brad Kim, BlackRock’s head of Asia Pacific diversified infrastructure, said at a media briefing on Sept 25. “Water infrastructure will need to almost double over the next five years,” he said, referring to cooling mechanisms, “and overall energy consumption will increase by about 50% in the next 10 years across Asia Pacific”.
Globally, the surge in electricity demand is outstripping the available power supply in many parts of the world, leading to growing concerns of outages and price increases for the most data centre-dense regions. Asia is no exception, with tech companies rushing to secure long-term contracts to power the data farms that feed artificial intelligence programs.
Southeast Asia in particular has been attracting investment in recent months, with the likes of Amazon and Microsoft pledging billions of dollars to build data centres in the region.
Still, Asia lags the rest of the world in terms of infrastructure investment, requiring an estimated US$1.7 trillion ($2.19 trillion) a year through 2030 to maintain its growth momentum, according to the Asian Development Bank. While government reforms could bridge up to 40% of the region’s infrastructure gap, the rest would have to come from the private sector, the multilateral lender said.
BlackRock, the world’s biggest asset manager, has already committed to raising US$30 billion for AI investments with tech giant Microsoft, with most of the funds to be pumped into US locations. Google has also partnered with it to procure up to 300 megawatts of solar energy from Taiwan’s New Green Power, a BlackRock’s portfolio company.
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“Every client we speak to is interested in investing in infrastructure, specifically energy transition and digital related infrastructure,” said Charlie Reid, co-head of Asia Pacific climate infrastructure at BlackRock. “There’s a real convergence of infrastructure investment opportunities” between the two themes, he said.
