TORONTO — Artificial intelligence brings massive demand for power and infrastructure and Brookfield Asset Management Ltd. says it is creating big opportunities for companies with the scale to take them on.
The company, which has extensive holdings in infrastructure, real estate and energy, said Wednesday it's well-placed to both help fund and build such projects.
"Trillions of dollars are needed to develop data centres, telecom towers, fibre, semiconductor manufacturing, automation assets, and, of course, power supply and transmission. All at a time while governments and traditional capital sources remain constrained," BAM president Connor Teskey told a conference call with analysts to discuss the company's latest results.
"The key takeaways here are there's still very, very significant demand from sovereigns and corporates for capital to invest in the infrastructure that supports the AI build-out going forward, and the reality of those large-scale opportunities is they're not available to everyone."
BAM, which says the value of its asset management business is approaching US$100 billion, has already inked some major deals for AI support. On Monday, it said it would spend about $30 billion by 2030 to boost AI capacity in France.
The funding commitment, announced during a global AI summit there, involves upwards of $22 billion in data centre investments led by Data4, a developer Brookfield bought in 2023. The company also plans more than $7 billion in related infrastructure like data transfer, chip storage and energy generation.
Last year, it signed an agreement with Microsoft that it said provides a pathway for it to supply the tech giant with over 10.5 gigawatts of new renewable energy capacity between 2026 and 2030.
The huge energy demands for AI have created worries about how much the trend will increase emissions, but BAM chair Bruce Flatt said it will also give clean energy a boost.
"Renewables will be the biggest beneficiary of growing electricity demand because they are the cheapest option. And off-takers will always absorb as much of the cheapest source of power before turning to more expensive forms of power," said Flatt, who is also chief executive of Brookfield Corp.
He said, and repeated for emphasis, that the overall demand trends will require a doubling of electricity generation capacity, along with the infrastructure to support it, and that will continue to drive opportunities.
The trade wars U.S. President Donald Trump is starting could disrupt some of the supply chains that also support energy development, but Teskey said Brookfield's business and assets have only a small portion of operations that focus on goods and services crossing borders.
Brookfield also invests in critical infrastructure, so it is also less vulnerable to inflation trends, he said.
"The bulk of our business will be largely insulated from any price increases as a result of tariffs, if they are to be implemented."
The company had however already started orienting its business more to the U.S. before the election. Last October, it announced it had moved Brookfield Asset Management's headquarters to New York as part of an effort to get listed on more U.S. stock indexes, while staying incorporated in Canada.
As part of its efforts to be on more indexes and simplify its structure, Brookfield also made BAM the full owner of the asset management business, while parent company Brookfield Corp. kept its 73 per cent stake in the business by instead owning 73 per cent of BAM shares.
An analyst on the call asked if the company was also considering a corporate move to the U.S. to be included in the S&P 500 index, but chief financial officer Hadley Peer Marshall said they were in a good position after the headquarters move and reorganization.
"We are incorporated in Canada and I don't think we need to change that in order to have access to other U.S. indices. So from our standpoint, given our U.S. focused business, and the other criteria that are applicable in those types of analysis, we feel we're well framed out for that."
Brookfield Asset Management Ltd. said Wednesday it earned fourth-quarter net income of US$186 million or 42 cents US per diluted share from its stake in the asset management business, based on its 27 per cent ownership before the asset transfer with Brookfield Corp. that it completed Feb. 3.
The result was up from a profit of US$95 million or 24 cents US per diluted share a year earlier.
The company also said it will pay a quarterly dividend of 43.75 cents US per share, up from 38 cents US per share.
The full asset management business, which reports its results in U.S. dollars, reported a fourth-quarter profit attributable to the business of US$688 million, up from US$374 million a year earlier.
This report by The Canadian Press was first published Feb. 12, 2025.
Companies in this story: (TSX:BAM, TSX:BN)
Ian Bickis, The Canadian Press