Canadian investment firm Brookfield Asset Management (BAM) aims to raise $10 billion for a new fund that seeks to capitalize on robust demand for artificial intelligence (AI) infrastructure, the Wall Street Journal reported. Interestingly, the company has already gained support from chip giant Nvidia (NVDA) and Kuwait Investment Authority (KIA), which intend to invest in this fund as founding partners.
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It is worth noting that BAM, which has $1 trillion in assets under management (AUM), is one of the largest global investors in the AI value chain. Reuters noted that BAM has invested more than 100 billion euros ($115.83 billion) in digital infrastructure, renewable power, and chip manufacturing. The news of the AI infrastructure fund comes amid growing concerns about the steep valuations of AI stocks and elevated spending levels.
Brookfield Focuses on AI Infrastructure via New Fund
Brookfield Asset Management plans to raise $10 billion and use this amount, along with additional co-investments and debt, to build and acquire around $100 billion worth of AI infrastructure. BAM forecasts that it will cost $7 trillion to build the infrastructure to support the AI wave over the next decade. The AI infrastructure fund aims to invest in data centers, power providers, and chip manufacturing. The report highlighted that Brookfield aims to dedicate a significant amount of the fund’s capital toward developing projects from scratch on undeveloped land.
Interestingly, BAM has already raised $5 billion from its own balance sheet and some investors, including Nvidia and KIA. Semiconductor company Nvidia has been making strategic investments to capitalize on the ongoing AI boom. The company’s key deals include a $100 billion agreement to invest in ChatGPT maker OpenAI (PC:OPAIQ). Also, in the recently announced partnership between Nvidia, Microsoft (MSFT), and Anthropic, the AI chip provider has agreed to invest $10 billion.
In a statement to Reuters, Nvidia CEO Jensen Huang said, “AI infrastructure demands land, power, and purpose-built supercomputers—and our partnership with Brookfield brings all of these elements together in a ready-to-deploy AI cloud.”
Reportedly, Brookfield’s new AI infrastructure fund has already made a few investments, including a $5 billion deal with Bloom Energy (BE) to install power in data centers. BAM has also struck partnerships with the governments of France and Sweden to develop AI infrastructure.
Is BAM a Good Stock to Buy?
Currently, Wall Street has a Hold consensus rating on Brookfield Asset Management stock based on three Buys, six Holds, and one Sell recommendation. The average BAM stock price target of $65.40 indicates 31.1% upside potential. BAM stock has declined about 8% year-to-date.
