Blue Owl, Chirisa Technology Parks and PowerHouse Data Centers announce first phase of $5 Billion Joint Venture Development Partnership

Rhea-AI Summary

Blue Owl Capital, Chirisa Technology Parks (CTP), and PowerHouse Data Centers have announced a $5 billion joint venture to develop large-scale AI/HPC data centers. The first phase focuses on building 120MW of capacity for CoreWeave in 2025 and 2026 at CTP's 350-acre campus near Richmond, VA. This innovative partnership aims to rapidly deploy new AI/HPC capacity across the United States on a Built-to-Suit basis.

The joint venture plans further expansions in New Jersey, Pennsylvania, Texas, Kentucky, and Nevada. This collaboration brings together Blue Owl's financial expertise, CTP's development capabilities, and PowerHouse's real estate leadership to meet the growing demand for hyperscale infrastructure in the AI landscape.

Positive

• $5 billion joint venture for AI/HPC data center development
• 120MW capacity to be delivered for CoreWeave in 2025-2026
• Expansion planned across multiple states
• Innovative and flexible capital solution for rapid deployment
• Partnership with major AI player CoreWeave

Negative

• None.

Insights

Financial Analyst

This $5 billion joint venture represents a significant investment in the rapidly growing AI/HPC data center market. The partnership's focus on CoreWeave, a key player in AI infrastructure, signals strong demand in this sector. The initial 120MW capacity deployment, with more in the pipeline across multiple states, indicates substantial scalability potential.

Financially, this venture could yield substantial returns given the current AI boom. However, investors should consider the capital-intensive nature of data center development and potential risks such as market saturation or technological shifts. The innovative and flexible capital solution mentioned could provide a competitive edge in rapidly deploying new capacity, potentially leading to faster revenue generation and market share gains.

Tech Expert

The joint venture's focus on AI/HPC (High-Performance Computing) data centers is particularly noteworthy. These specialized facilities are important for handling the intense computational demands of AI workloads, including machine learning and deep learning applications. The partnership's ability to rapidly deploy new AI/HPC capacity could be a game-changer in addressing the growing demand for AI infrastructure.

The mention of CoreWeave as a key customer is significant. CoreWeave is known for its GPU-accelerated cloud platform, which is essential for AI training and inference. This partnership could potentially accelerate AI innovation by providing the necessary infrastructure at scale. However, the tech landscape is rapidly evolving and investors should monitor how this venture adapts to emerging technologies and potential shifts in AI computing paradigms.

Market Research Analyst

This joint venture taps into the booming AI infrastructure market, driven by the surge in AI applications across industries. The geographic diversification across multiple states (Virginia, New Jersey, Pennsylvania, Texas, Kentucky and Nevada) is strategic, potentially catering to different regional demands and mitigating risks associated with power availability and natural disasters.

The partnership's focus on Built-to-Suit developments for hyperscale and enterprise customers suggests a tailored approach that could lead to long-term, stable contracts. This model could provide more predictable revenue streams compared to speculative developments. However, the success of this venture will largely depend on the continued growth of AI adoption and the ability to attract and retain high-profile clients beyond CoreWeave. Investors should monitor industry trends and competitor movements in this rapidly evolving market.

CHICAGO and RICHMOND, Va. and MCLEAN, Va., Aug. 29, 2024 /PRNewswire/ -- Funds managed by Blue Owl Capital Inc. ("Blue Owl"), Chirisa Technology Parks ("CTP"), and PowerHouse Data Centers ("PowerHouse") have today executed a joint venture development agreement ("JV") focused on the development of large-scale AI/HPC data centers for CoreWeave, Inc. ("CoreWeave"). The agreement is intended as the first stage of a partnership with capacity to deploy up to $5 Billion of capital for turnkey AI/HPC data center developments supporting CoreWeave and other hyperscale and enterprise data center customers.

The JV represents an innovative and flexible capital solution allowing for the rapid development and deployment of new AI/HPC capacity across the United States on a Built-to-Suit basis. The initial 120MW of capacity under the program will be delivered for CoreWeave in 2025 and 2026 at CTP's 350-acre campus near Richmond, VA. Further deployments in the pipeline include brownfield and greenfield campuses in New Jersey, Pennsylvania, Texas, Kentucky and Nevada.

Announcing the transaction today, Lee Hayes, President and CEO of CTP stated, "This breakthrough transaction with Blue Owl, CTP and PowerHouse is the first stage of a large-scale partnership focused on meeting the near-term requirements of our hyperscale customer base.  Through innovative structuring, broad financial distribution and the transactional expertise of our partners at Blue Owl, this partnership unlocks very substantial growth capital for one of the most important players in today's AI hyperscale landscape."

Doug Fleit, CEO and Co-founder of PowerHouse, continued, "PowerHouse is proud to partner with Blue Owl and CTP. By bringing our proven real estate leadership and cadre of acquisition, development, and power procurement experts to the JV, this partnership will redefine the landscape of precision hyperscale infrastructure."

Marc Zahr, Blue Owl's Co-President and Head of Real Estate added, "This partnership between Blue Owl, CTP and PowerHouse brings together three distinguished operators in our respective areas of expertise. Blue Owl is in the process of deploying significant amounts of capital in support of large-scale data center development transactions across the US and Europe. We are happy to partner with CoreWeave, CTP and PowerHouse and look forward to supporting the partners longer term development ambitions."

Newmark served as advisor to the Joint Venture. 

About CTP

Chirisa Technology Parks (CTP) is focused on developing highly connected data center campuses with ample power availability in high-demand growth markets in the United States and Europe. CTP's existing data centers are located in Richmond, VA; Chicago, IL; Piscataway, NJ; and Seattle, WA. CTP currently offers over 500,000 square feet of purpose-built data center capacity, with a pipeline in excess of 400MW under development in the USA. CTP's designs and rapid delivery process are focused on high-efficiency, leading-edge deployments. CTP has broad capability to partner and/or operate critical facilities, offering solutions for powered shell, build-to-suit, and turnkey delivery of assets for large and sophisticated customers.

About Powerhouse

PowerHouse Data Centers, a wholly owned division of American Real Estate Partners (AREP), is a developer and owner of next-generation data centers and provides technical real estate solutions for hyperscalers nationwide. Starting in Northern Virginia's Data Center Alley, the world's largest data center market, before strategically expanding to key markets across the United States, PowerHouse owns its land sites, offering unparalleled fast-track approvals and zoning approvals in its full suite of development services.

As an industry disruptor, PowerHouse provides flexible next-generation data center models with the quickest speed to market of any data center while meeting hyperscalers' growing market, data, utility, and space demands. The company has 30 buildings currently in planning or underway, representing over 2.3 GW of power in six major US markets. Operating as the data center division of AREP, PowerHouse is uniquely positioned as a leader in world-class data center development.

With some of the industry's deepest real estate relationships, PowerHouse leverages its strategic joint venture partnerships, proven leadership, and best-in-class technical expertise to deliver innovative real estate solutions nationwide. Visit our newsroom for more information, and follow us on LinkedIn, YouTube, and X.

About Blue Owl

Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.

With over $192 billion in assets under management as of June 30, 2024, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 820 experienced professionals, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.

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SOURCE Chirisa Technology Parks

FAQ

What is the value of the joint venture announced by Blue Owl, CTP, and PowerHouse?

The joint venture announced by Blue Owl, CTP, and PowerHouse has the capacity to deploy up to $5 billion of capital for turnkey AI/HPC data center developments.

How much initial capacity will be delivered for CoreWeave under this joint venture?

The initial capacity to be delivered for CoreWeave under this joint venture is 120MW, scheduled for 2025 and 2026.

Where will the first phase of the data center development be located?

The first phase of the data center development will be located at CTP's 350-acre campus near Richmond, Virginia.

Which states are targeted for future data center deployments under this partnership?

Future data center deployments are planned in New Jersey, Pennsylvania, Texas, Kentucky, and Nevada.

How does this joint venture affect Blue Owl Capital's stock (OWL)?

While the specific impact on Blue Owl Capital's stock (OWL) is not directly mentioned, this $5 billion joint venture represents a significant investment in the growing AI/HPC data center market, which could potentially positively influence investor sentiment.