Supply-Demand Dynamics for AI and Data Centers

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode dives into digital infrastructure and how it powers the growth of artificial intelligence and other major trends in digitalization and electrification.

We sat down in Blue Owl’s NYC office with Matt A’Hearn, an asset management entrepreneur and executive at the firm.

Matt is a Senior Managing Direct at Blue Owl and Head of Digital Infrastructure. He’s responsible for leading the overall management of Digital Infrastructure, including strategy, investments, and portfolio management.

Prior to joining Blue Owl, Matt was the Managing Partner and a Founder of IPI Partners, the predecessor firm to Blue Owl Digital Infrastructure. IPI was acquired by Blue Owl in 2024.

Prior to founding IPI, Matt led the global investment banking practice in communications infrastructure at Moelis & Company.

Matt and I had a fascinating and thought-provoking discussion about the future of digital infrastructure. We covered:

• The how and the why of digital infrastructure.
• Investing in data centers.
• The evolution of digital infrastructure.
• How to best partner with and serve the need of hyperscalers.
• The importance of power generation for AI. 
• How there are different ways to approach gaining exposure to AI as an investment theme.

Thanks Matt for coming on the show to share your wisdom and expertise in private markets and digital infrastructure.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Show Notes
00:00 Our Sponsor, Ultimus

01:57 Welcome to the Alt Goes Mainstream Podcast

02:05 Guest Introduction: Matt A’Hearn

03:36 Evolution of Digital Infrastructure

04:02 Founding IPI Partners

04:15 Digital Infrastructure and AI

05:35 Early Challenges in Data Center Investing

06:13 Cloud Growth and Hyperscale Companies

07:05 Partnerships with Hyperscalers

08:07 Financing Hyperscalers

10:14 AI and Cloud: A Generational Opportunity

11:51 Supply and Demand Dynamics in AI

13:21 Power and Infrastructure Challenges

14:55 Site Selection and Power Considerations

17:53 Scale and Capital Requirements

22:32 Data Center Capacity Needs

23:35 Investment Opportunities in Digital Infrastructure

24:21 Blue Owl's Capital Strategy

26:25 The Blue Owl Transaction

26:35 Capital Needs in the Industry

26:58 Feedback from Hyperscalers

27:18 Joining Blue Owl

27:51 Founding IPI

28:50 Building the Firm

30:38 Differentiating IPI

31:36 Early AI Insights

32:26 AI and Cloud Growth

34:41 Investment Opportunities in Digital Infrastructure

35:27 Risk-Adjusted Investment Strategies

36:39 Underwriting Digital Infrastructure

38:22 Capital Allocation in Tech Companies

39:17 Meta and Data Center Development

40:41 Alternative Asset Management in Tech

41:45 Merging Investment Cultures

43:19 Challenges and Opportunities

43:53 Wealth Channel Expansion

45:51 Evergreen Structures and Long-Term Investments

50:50 Future of Digital Infrastructure

Editing and post-production work for this episode was provided by The Podcast Consultant.