BlackRock predicts AI will drive 50% increase in energy demand in Asia

BlackRock expects the artificial intelligence and data center boom to drive a 50 percent increase in energy consumption in the Asia-Pacific region over the next decade, a senior executive at the world’s largest asset manager said on Wednesday.

“The demand for data centers over the next five years will be twice what the markets are seeing now,” Brad Kim, BlackRock’s managing director of global infrastructure funds in Asia Pacific, said at a press conference published by Bloomberg.

“(O)verall energy consumption will increase by about 50% over the next 10 years in the Asia-Pacific region,” the executive added.

Tech giants have already begun striking long-term power supply contracts in Asia, where electricity demand and overall demand are growing and will grow more than previously anticipated due to demand for data centers and the rise of artificial intelligence.

Last month, Microsoft signed a deal to purchase all solar power from a project in Singapore, as the tech giant works toward its goal of covering 100% of its electricity consumption, 100% of the time, with zero-carbon energy purchases by 2030.

Microsoft has signed an agreement with Spanish company EDP Renewables to purchase 100% of the renewable energy exported to the grid from EDP Renewables’ SolarNova 8 project in Singapore.

BlackRock says that as AI advances, Asia will present huge opportunities for infrastructure investment, including energy infrastructure.

“Every client we talk to is interested in investing in infrastructure, especially energy transition and digital infrastructure,” said Charlie Reid, head of renewable energy investments in Asia Pacific at BlackRock, as quoted by Bloomberg.

Earlier this month, BlackRock, Global Infrastructure Partners, Microsoft, and MGX launched a new AI partnership to invest in data centers and support energy infrastructure. The partnership will initially seek to unlock $30 billion of private equity capital over time from investors, asset owners, and corporations, which in turn will mobilize up to $100 billion of total investment potential, including debt financing.

“Mobilizing private capital to build AI infrastructure like data centers and power plants will open up a multi-trillion dollar, long-term investment opportunity,” said Larry Fink, Chairman and CEO of BlackRock.

Author: Tsvetana Paraskova for Oilprice.com

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