Bloom Energy Corp. struggled for years to convince investors that its fuel cells were a practical alternative to cheaper electricity sources. Then Brookfield Asset Management Ltd. stepped in, right as the artificial intelligence boom accelerated.
Brookfield's AI Infrastructure Push
The investment manager pledged up to US$5 billion late last year to deploy Bloom's devices at data centers that require energy to run AI models. This marked the first wager for Brookfield's new artificial intelligence fund, part of a larger campaign to raise US$50 billion for the grids, transportation networks, and physical structures driving the economy.
Brookfield's cash will help meet the city-size electricity needs of an Oracle Corp. data centre campus in New Mexico, according to sources familiar with the matter. The project spans 1,400 acres of desert land and ties Brookfield to Oracle's aggressive push to support ChatGPT maker OpenAI's power-hungry computing processes.
Unprecedented Scale and Investor Concerns
Best known as an offshoot of a Canadian conglomerate with infrastructure bets spanning freight railways, toll roads, and utilities, today the New York-based investment giant is betting that the physical foundations behind the computing boom will become a US$7 trillion opportunity. AI will feature in every infrastructure strategy as the firm seeks to raise roughly US$50 billion across such funds.
Infrastructure investments have historically taken the form of bridges, sewage systems, and other public works, not data centers or chip providers. Some investors have hesitated to back the AI fund, questioning whether Brookfield is stretching the definition of 'infrastructure.'
TD Securities Inc.'s Cherilyn Radbourne summed up concerns on an analyst call: 'How do you manage the balancing act of leaning in enough to AI without getting over-allocated to it?'
CEO's Response and Market Implications
Brookfield Asset Management's 38-year-old CEO, Connor Teskey, responded that the investment opportunity in AI infrastructure is so vast that the firm can be selective. The stakes are high for Brookfield, which is banking on AI to help double its fee-bearing assets and close the gap on rivals Blackstone Inc. and Apollo Global Management Inc.
These asset managers are pouring ever more cash into AI, stepping in to finance deals when banks cannot supply the sheer magnitude of cash needed to construct massive data facilities. The ever-larger deals are turning infrastructure, once a staid corner of finance, into a buzzy space sparking both ebullience and trepidation.
'Infrastructure firms broadly are seeking to invest in the enablement of the AI boom,' said Alan Synnott, global head of real assets at Mercer. 'It's important investors know what they're investing in along the way and are making sure they deal with technology obsolescence.'
