ADQ forms $25bn US energy venture to power data centres

Deal coincides with visit to the US by Sheikh Tahnoon bin Zayed

A building complex that houses a data centre in the US state of Texas. Bloomberg

Abu Dhabi's sovereign wealth fund ADQ announced on Wednesday that it has joined with US private equity firm Energy Capital Partners to invest more than $25 billion in energy projects to power data centres, mostly in the US.

The investments will be carried out through a 50-50 partnership across 25 gigawatts worth of new power generation and energy infrastructure, ADQ said in a statement.

The partnership "aims to service the growing power needs of data centres, hyperscale cloud companies and other energy-intensive industries," ADQ said.

Chief executive Mohamed Alsuwaidi said ADQ is in a prime position to help address the infrastructure needs of data centres and AI hyperscalers.

"Meeting these power needs presents evolving challenges for governments worldwide in ensuring secure, stable and commercially competitive electricity supply," Mr Alsuwaidi said.

"Our partnership with ECP allows us to invest meaningfully in generation and related infrastructure assets that support accelerating demand for power, promoting the progress of these industries and helping to future-proof economies."

The deal coincides with a visit to the US by Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi and UAE National Security Adviser.

During the visit, he met President Donald Trump and discussed strengthening ties with the US in sectors such as artificial intelligence and infrastructure, state news agency Wam reported on Wednesday.

In January, UAE company Damac Properties announced it would make a $20 billion investment in the US to build data centres.

As consumer adoption of chatbots and other AI quickly grow, so have electricity needs because of the processing power required by AI infrastructure.

By most estimates, a simple query to an AI chatbot uses 10 times more energy than a similar search on Google. That's because the large language models that make up the backbone of AI contain parameters requiring ample computing power that quickly uses electricity.

A recent report from the US Energy Department indicated that data centres used about 4.4 per cent of total electricity in the country. By 2028, that could increase to 12 per cent.

Doug Kimmelman, ECP’s founder and executive chairman, said his company was honoured to be a partner with ADQ to satisfy the energy needs caused by AI.

"AI will be a major driver of US economic and job growth over the coming decade, but not unless ample new electricity supplies are developed," Mr Kimmelman said.

"Given the tightening supply-demand dynamics in US power markets, new generation capacity will be needed and our focus in this partnership will therefore primarily be on new-build, natural gas-fired power-generation assets in scale to meet the needs of hyperscalers on a timely basis.”