Bank of America sets $250B initiative for infrastructure
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America's biggest financial firms are lining up to unlock vast sums of private capital for infrastructure investment.
- A new $250 billion effort from Bank of America is the latest in a week packed with jaw-dropping funding announcements.
Why it matters: Amid an AI buildout that is creating new strains on computing power, energy supplies and manufacturing capacity, major banks see opportunity for large-scale investment that could help satisfy those needs — and reward investors.
Driving the news: Bank of America this morning announced a "Critical Infrastructure Finance Initiative" that intends to mobilize $250 billion in investment over the next year.
- Earlier this week, Morgan Stanley announced its own infrastructure initiative, which it said will total $1.5 trillion over a decade. Both firms tied their plans to honoring the 250th anniversary of the U.S. being celebrated this summer.
- Also this week: a remarkable announcement from chipmaker Nvidia of plans to finance $500 billion in AI infrastructure buildout in partnership with Apollo, BlackRock, Goldman Sachs and other Wall Street firms.
Between the lines: Dizzying sums of capital are being demanded for the AI buildout and associated power, water, transportation, and other needs.
- Banks see opportunity in aligning vast sums of global savings looking for decent returns with capital-thirsty U.S. long-term investments, many of which are related to the AI buildout.
What they're saying: "It's the scale and the speed that's different," compared with past infrastructure buildout, Karen Fang, global head of infrastructure and sustainable finance at BofA, tells Axios.
- The investments will include all sorts of funding structures, she said: "equity markets, debt markets, loan markets, hybrid markets, all of the above," as well as international investment.
- "American exceptionalism is attracting a lot of foreign investment dollars in this country," she says. "We want to build American infrastructure, but we'll take anyone's dollars."
The bottom line: A future of abundant computing power, electricity and manufacturing capacity won't come cheap, but the biggest financial firms are climbing over each other to try to deliver it.
