Brookfield Asset Management Ltd. is making a massive bet on artificial intelligence infrastructure, committing up to US$5 billion to deploy Bloom Energy Corp.'s fuel cells at data centers powering AI models. This marks the first investment from Brookfield's new AI fund, part of a broader campaign to raise US$50 billion for grids, transportation networks, and physical structures driving the economy.
A New Frontier for Infrastructure
Historically, infrastructure investments focused on bridges, sewage systems, and public works. Now, Brookfield is targeting data centers and chip providers, raising questions about whether this stretches the definition of 'infrastructure.' Some investors have hesitated to back the AI fund due to these concerns.
The investment opportunity in AI infrastructure is so vast that the firm can be selective, explained Brookfield Asset Management's chief executive, Connor Teskey. The stakes are high for Brookfield, which aims to double its fee-bearing assets and close the gap on rivals Blackstone Inc. and Apollo Global Management Inc.
Bloom Energy Deal and Oracle Partnership
Brookfield's cash will help meet the city-size electricity needs of an Oracle Corp. data centre campus in New Mexico, spanning 1,400 acres across desert land. This ties Brookfield to Oracle's aggressive push to support ChatGPT maker OpenAI's power-hungry computing processes.
Bloom Energy Corp. struggled for years to convince investors its fuel cells were a practical alternative to cheaper electricity. Then Brookfield came along right as the AI boom ramped up, pledging up to US$5 billion to deploy Bloom's devices at data centres.
Concerns About Tech Obsolescence
TD Securities Inc.'s Cherilyn Radbourne summed up some concerns: 'How do you manage the balancing act of leaning in enough to AI without getting over-allocated to it?' Alan Synnott, global head of real assets at Mercer, added: 'It's important investors know what they're investing in along the way and are making sure they deal with technology obsolescence.'
Infrastructure firms broadly are seeking to invest in the enablement of the AI boom. The ever-larger deals are turning infrastructure, once a staid and sleepy corner of finance, into a buzzy space that's sparking both ebullience and trepidation.
Brookfield's AI zeal prompted questions about how it will hedge against new tech rendering existing investments obsolete. The firm 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.
