KKR and ECP Form $50 Billion Partnership to Boost AI Infrastructure

KKR and ECP form $50 billion partnership for AI infrastructure By Investing.com

NEW YORK & SUMMIT, N.J. - KKR, a prominent global investment firm, and Energy Capital Partners (ECP), a key player in U.S. power generation and renewables, have announced a strategic partnership valued at $50 billion. The collaboration is set to expedite the development of data center, power generation, and transmission infrastructure to support the burgeoning artificial intelligence (AI) and cloud computing sectors worldwide. This partnership leverages KKR's expertise in digital infrastructure alongside ECP's leading position in energy transition, aiming to meet the surging demand for data centers, which is currently hampered by a lack of reliable power sources. With U.S. data center demand expected to nearly triple by 2030, the investment required is anticipated to exceed $1 trillion. A single data center campus often demands over 1 gigawatt of power and necessitates an investment upwards of $15 billion, including data center and power equipment. The power demand for data centers is predicted to increase by 160% by 2030, a growth that cannot be sustained without the proper infrastructure. KKR and ECP's joint initiative is poised to provide scalable data center and power solutions, particularly for hyperscalers and other market participants, across various regions. The partnership is set to mobilize immediately available capital and deploy it effectively to meet infrastructure needs. With an existing 8 GW datacenter pipeline and 100 GW of power generation ready for operation or development, the collaboration is designed to address the infrastructure demands responsibly and swiftly. KKR will finance this strategic partnership through its infrastructure, real estate strategies, and managed insurance accounts. ECP will contribute from its existing and future infrastructure capital pools. KKR's infrastructure team, established in 2008, manages $77 billion in infrastructure assets, having invested over $29 billion in digital infrastructure and $15 billion in power, utilities, and energy. ECP, since its inception in 2005, has managed over 83 GW of diverse power generation assets. The strategic partnership is a response to the need for massive investments in U.S. power infrastructure to maintain the country's competitive edge in AI, addressing electricity costs and carbon emissions concerns. This announcement is based on a press release statement and reflects the growing emphasis on the intersection of technology and sustainable infrastructure investment. In other recent news, KKR & Co. Inc. has been making significant strides in its financial performance. The investment firm recently reported a robust third-quarter performance with record fee-related earnings (FRE) surpassing $1 billion, marking a 32% increase from the previous quarter. Adjusted net income (ANI) per share also rose notably to $1.38, demonstrating a 50% year-over-year growth. In addition, KKR's price target was recently increased by Evercore ISI, reflecting confidence in the firm's growth prospects. The new price target was set at $158.00, up from the previous $145.00. This decision was influenced by several factors contributing to KKR's optimistic outlook, including robust investment performance, an increase in unrealized carry and embedded balance sheet gains, and strong fundraising activities. Furthermore, KKR has raised $87 billion in new capital this year, more than double the amount in the same period of 2023. The firm's strategic initiatives and market performance have led to substantial growth in assets under management (AUM) and a positive outlook for future earnings and monetizations. These recent developments underscore KKR's strong momentum in proprietary origination and fundraising, with a total addressable market projected to grow from $5 trillion to $7 trillion. KKR's strategic partnership with Energy Capital Partners aligns well with its current market position and financial performance. According to InvestingPro data, KKR boasts a substantial market capitalization of $123.65 billion, underlining its significant presence in the investment landscape. This robust financial standing provides a solid foundation for the $50 billion partnership aimed at developing critical infrastructure for AI and cloud computing. The company's revenue growth is particularly noteworthy, with an impressive 82.18% increase over the last twelve months as of Q3 2024. This strong performance is further reflected in KKR's stock price, which has seen a remarkable 154.95% total return over the past year. These figures suggest that KKR is well-positioned to capitalize on the growing demand for data center and power infrastructure. InvestingPro Tips highlight KKR's strength in the Capital Markets industry and its consistent dividend payments, having maintained them for 15 consecutive years. This track record of stability, combined with the company's recent strong returns, indicates a solid financial foundation for undertaking large-scale infrastructure projects. It's worth noting that KKR currently trades at a high P/E ratio of 42.86, which may reflect market expectations for future growth aligned with initiatives like the ECP partnership. Investors interested in a deeper analysis can find 16 additional tips on InvestingPro, offering further insights into KKR's financial health and market position.

$50 Billion Data Center Partnership: KKR And ECP Unite To Power The Future Of AI And Cloud Computing - KKR (NYSE:KKR)

U.S. data center demand could triple by 2030, driving over $1T in potential investments. KKR & Co. Inc. KKR and Energy Capital Partners disclosed a strategic partnership worth $50 billion to drive development in data centers, power generation, and transmission infrastructure to support AI and cloud computing growth worldwide. This collaboration leverages KKR's digital infrastructure and energy expertise with ECP's platform in electrification, power, and renewable energy. The strategic alliance seeks to deliver large-scale data center and power solutions tailored for hyperscalers and other market participants, meeting their infrastructure requirements across different regions to enable extensive model training, tuning, and inferencing. KKR and ECP intend to work alongside industry leaders, such as utilities, power and data center developers, and independent power producers, to accelerate the development of the data center campuses essential for hyperscalers. Notably, U.S. data center demand is expected to nearly triple by 2030, potentially fueling over $1 trillion in investments. A typical planned data center campus can exceed 1 gigawatt (GW) in power demand, requiring upwards of $15 billion in data center and power infrastructure investments. Joe Bae, Co-Chief Executive Officer, KKR said, "Data center power demand is expected to grow by 160% by 2030, a demand that will go unmet without the right infrastructure in place, which is critical to boosting productivity, supporting electrification and helping countries create a competitive edge in AI." Waldemar Szlezak, Partner and Global Head of Digital Infrastructure, KKR, stated, "With our combined footprint and capabilities, we have a more than 8 GW existing datacenter pipeline, 100 GW of currently operating and development-ready power generation, and significant experience working with stakeholders across both industries to help realize this opportunity quickly and responsibly." This week, KKR and Capital Group submitted registration statements to the SEC for two public-private fixed-income funds: Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+. Both funds are anticipated to launch in the U.S. during the first half of 2025, pending regulatory approval. Investors can gain exposure to KKR via FM Focus Equity ETF FMCX and EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF LBO. Price Action: KKR shares are up 1.35% at $141.21 at the last check Wednesday. Photo courtesy: Pixabay Read Next: KKR Acquires 25% Stake In Enilive, Supporting Eni's Push For Energy Transition This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

KKR and Energy Capital Partners Form $50 Billion AI Partnership

KKR & Co. and Energy Capital Partners agreed to a $50 billion partnership to accelerate the development of infrastructure for artificial intelligence. The agreement between the alternative investment manager and the private owner of power generation and renewables would focus on developing data centers and power generation and transmission infrastructure, the firms said in a statement Wednesday. They see a $1 trillion need for AI and cloud infrastructure by 2030.