Related Latest to Jump Into the Data Center Fray

Related Companies is betting big on data centers.

Jeff Blau’s firm is seeking to raise up to $8 billion in capital to invest in the infrastructure property type that has surged in scale alongside artificial intelligence, Bloomberg reported. Initial capital is expected to be committed to the venture, Related Digital, during the second half of the year.

Related and its investors are contributing a minimum of $500 million to the venture. The first project, linked to the venture in North America, is a data center in Ontario, Canada. It’s expected to be delivered to a hyperscale firm beginning in the summer. It also has projects lined up in Chicago, Missouri, Wyoming and beyond.

“The demand is so great and we have all the execution capabilities,” Related CEO Jeff Blau said of the company’s latest venture.

Brent Behrman, a former executive with data center developer CyrusOne, will serve as Related Digital’s chief investment officer. Former Vista Equity Partners executive Greg Myers will be chief financial officer. Related Fund Management will lead the venture’s investment activities.

Since artificial intelligence became the most-hyped technology several years ago, companies have raced to develop the data infrastructure needed to support the high-computing power required to support the industry. Tech companies such as Amazon, Google and Microsoft — as well as developers like Blackstone and Equinix — have spent billions to build data centers across the United States.

While data centers are being developed at a comparatively high rate in the United States, they come with significant drawbacks, too. They drain the energy resources, create environmental concerns and draw tepid interest from residents who live near the colossal structures.

This year alone, Microsoft budgeted $80 billion for data center projects across the globe, while Meta could be looking to spend up to $60 billion on capital expenditures geared primarily toward real estate and data centers.

— Holden Walter-Warner