Blackstone Invests Over $500 Million in Lancium's AI Data Center Buildout
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Blackstone Inc. has invested over $500 million in Lancium Inc., a company constructing over 5 gigawatts of data centers in West Texas to support the growing energy demands of artificial intelligence applications, as reported by Bloomberg.
The investment, finalized in recent weeks, will help fund the construction of five Lancium facilities in areas of Texas with abundant wind and solar energy, the sources said, who asked not to be identified because the deal isn't public. Lancium constructs the facilities, while the tech companies that use them provide their own computing equipment.
Bloomberg reports that Blackstone's investment will cover Lancium's capital requirements to bring the data centers online by approximately 2028. Innovative approaches are being explored to leverage zero-carbon resources, including the potential integration of on-site solar and battery storage. The scale of this undertaking is substantial, as 1 gigawatt of power generation in Texas typically suffices for 200,000 homes.
Goldman Sachs Group Inc. acted as Lancium's advisor for the transaction. Representatives from Blackstone, Lancium, and Goldman Sachs have declined to comment to Bloomberg on the deal.
The first Lancium campus in Abilene, Texas, is scheduled to launch next year. This project is being spearheaded by a $3.4 billion joint venture established last month with Blue Owl Capital, Crusoe Energy Systems, and Primary Digital Infrastructure.
The rapid expansion of data centers to support the deployment of AI is straining power grids globally. Lancium is addressing this challenge by focusing on clean energy solutions and making necessary upgrades to grid infrastructure, including the construction of substations and transmission improvements.
Bloomberg News estimates that a global investment of at least $1 trillion is needed for data centers, electricity supplies, and communication networks to support the AI boom. Lancium's pivot to AI follows its 2021 announcement of securing approval for the Abilene project, where its initial focus was on supplying energy to cryptocurrency miners.