Imagine a world where artificial intelligence (AI) developers can tap into a vast network of cloud computing resources, without the need to navigate complex infrastructure and supply chains. For Brookfield, a leading private equity firm, this is more than just a vision – it’s a business strategy that’s taking shape with the launch of its own cloud business.
The move, reported by The Information earlier this week, marks a significant shift in Brookfield’s approach to the AI market. By leasing chips directly to AI developers inside data centres, the firm aims to gain end-to-end control of the AI value chain. This involves developing AI infrastructure, providing data storage and processing capabilities, and even powering AI data centres with sustainable energy sources.
## A New Cloud Business Born Out of Necessity
Brookfield’s decision to enter the cloud market is partly driven by the growing unease in the markets about industrial constraints to AI-linked capital expenditures. As AI adoption continues to surge, concerns over energy efficiency, public utilities, and environmental sustainability are becoming increasingly pressing.
The firm’s $10 billion AI fund, launched in conjunction with its cloud business, will help address these challenges by investing in AI infrastructure projects that prioritize energy efficiency and sustainability. With a focus on data centre development in France, Qatar, and Sweden, Brookfield aims to create a robust and reliable AI ecosystem that meets the needs of developers and businesses alike.
## Partnership with Radiant and a Cloud Company
Brookfield’s cloud business will be operated through a new cloud company called Radiant, which will have priority access to lease any data centres developed under the fund. This strategic partnership is expected to give Brookfield a competitive edge in the AI market, where companies are vying for control of the cloud and AI value chain.
In November, Brookfield launched its $100 billion AI infrastructure program, anchored by the Brookfield Artificial Intelligence Infrastructure Fund. With $10 billion worth of commitments already fulfilled, the firm is well-positioned to capitalize on the growing demand for AI infrastructure.
## Traditional Cloud Giants Under Pressure
The emergence of Brookfield’s cloud business and AI fund is likely to put pressure on traditional cloud giants such as Amazon, Microsoft, and Oracle. These companies are already facing challenges to optimize energy logistics and capital efficiency, and Brookfield’s entry into the market may force them to reassess their strategies.
By controlling inputs of the AI value chain, Brookfield can leverage its energy and real estate-heavy portfolio to create a more sustainable and efficient AI ecosystem. This approach may also give the firm a competitive advantage in the market, as it seeks to capitalize on the lucrative opportunities presented by the AI boom.
In conclusion, Brookfield’s decision to launch its own cloud business and AI fund marks a significant development in the AI market. As the firm seeks to gain end-to-end control of the AI value chain, it’s likely to put pressure on traditional cloud giants and force them to adapt their strategies. With a focus on energy efficiency, sustainability, and AI infrastructure development, Brookfield is well-positioned to capitalize on the growing demand for AI solutions.
