Blackstone Invests $500M in Lancium AI Buildout

(Bloomberg) -- Blackstone Inc. invested more than $500 million in Lancium Inc., which is building more than 5 gigawatts of data centers in West Texas with an eye on supplying the booming energy demand for artificial intelligence applications, according to people familiar with the matter.

The firm closed the equity stake in recent weeks in a transaction supporting Lancium’s plans to build five facilities in wind- and solar-rich areas of the state, said the people, who asked to not be identified because the deal isn’t public.

Houston-based Lancium constructs the facilities, while the tech companies that use the sites bring their own computing equipment.

Blackstone’s investment covers Lancium’s capital needs to bring the sites online by about 2028, the people said. Creative solutions are being considered to take advantage of zero-carbon resources, including potentially building solar and battery storage on site, they said. In Texas, 1 gigawatt is typically enough to power 200,000 homes.

Goldman Sachs Group Inc. advised Lancium on the transaction, one of the people said. Representatives for Blackstone, Lancium and Goldman Sachs declined to comment.

The first campus in Abilene is slated to come online next year with the development being led by a $3.4 billion joint venture formed last month with Blue Owl Capital, Crusoe Energy Systems and Primary Digital Infrastructure.

Related:Big Tech on Track to Pour More Than $180B into Data Centers This Year

Amid the race to support the data center boom needed to deploy AI, power grids are being strained by aging infrastructure, extreme weather and soaring demand. Lancium sits at the intersection of data centers and the transition to clean energy, which includes building substations and making other transmission upgrades to access the grid.

Globally, at least $1 trillion of spending is needed for data centers, electricity supplies and communications networks, according to an analysis by Bloomberg News.

AI is a pivot for Lancium, which was more focused on supplying energy to crypto currency miners when it announced in 2021 that it had won approval for the Abilene project.