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This morning, Brookfield announcing it's teaming up with Qatar on a new $20 billion AI in infrastructure investment. For more, let's go to Leslie Picker at the Goldman Sachs Financial Services Conference in New York City.
Feels like they have an announcement every single week. Leslie, [laughter] >> it really does, particularly in this infrastructure AI space. And luckily, we can learn a bit more about it because I'm here with Bruce Flatt, the CEO of Brookfield. Thank you, Bruce, for joining us today.
Um, so the new partnership that Sarah just outlined, that's part of a new strategy aimed at investing in infrastructure broadly, uh, tied to AI. You have 10 billion in equity through your own balance sheet and third party investors, including Nvidia. Um, and along with co-investments in debt, you plan to build and acquire as much as hundred billion dollars worth of AI infrastructure. Um, this of course is against this backdrop of concerns about where we're at in the cycle. Is is there still places are there still places to deploy that you feel like aren't frothy at this point in time?
>> So So maybe the most important thing is that what we do is lay the backbone infrastructure around the world in different sectors through c for centuries. So we've been doing it in real estate, we've been doing it in pipelines, we've been doing it in roads, we've been doing it in rail for many many decades. And now all we're doing is partnering with companies and countries to lay the next backbone of global infrastructure in their uh country and and in Qatar uh we've announced this project where we will uh lay artificial intelligence infrastructure in the country and and why it's important is that each country needs to have artificial intelligence backbone to drive their economy in the future and If you don't have it, businesses will leave. And that's really important. And this is a 20-year runway. So, you can pick and choose in the stock markets. That's not our business. Our business is just about laying infrastructure down. And uh what's important to us is finding power, building data centers, building compute capacity, and finding counterparties that have good credit quality on the other side. And if you do those three things, you will have very intelligent investments that earn good returns for very long periods of time. And that's what our business is about.
>> Infrastructure booms in in years past, whether it's railroads or fiber optic, they've seen kind of the ups and downs, the cycles, too. Are you worried about that? Are you worried that there is too much capital chasing this space because it is so uh you know important right now obviously, but at a certain price?
So remember our um our business is just financing the global best. So we're partnering with Google and we're partnering with Microsoft. We're partnering with countries of the world and most of those have high A double A or AAA credits and therefore we're just financing their businesses for long periods of time and unlike cycles before which you refer to when fiber was laid down there were no counterparties on the other side. So there will be mistakes made by some, but uh if you know what you're doing on building, if you have the capital right, and if you have counterparties on the other side of your transactions, this is a long long cycle and and uh and we're and we will all do very well in it.
>> So you're not too worried about just the overall level of debt that the hyperscalers are taking out taking on to achieve this?
>> No, no, this is uh they're all um investing for a very long-term future. And what I can tell you is from our indust we have 400 companies where we deploy we're deploying artificial intelligence in the early stages of deployment of artificial intelligence uh is very meaningful to business and uh those that get with it uh are going to excel and this is the next 10 to 15 years is going to be very exciting because of that.
Um, as part of your partnerships, uh, Sarah mentioned the one with Qatar, you also have Kuwait, uh, as part of this AI buildout. How are you thinking about re regional geopolitical risk, particularly given the evolving tech alliances that we've seen as it pertains to technology and competitiveness?
>> So, look, our um, all we try to do because we're investing very large sums of money for very long periods of time. So what we try to fi do is find good countries and invest with good people in good assets. And if you do that over the longer term, you're going to be fine. So we just try to we we have 30 40 countries that we invest into. Uh we go to them, we set up we stay for long periods of time and that backdrop allows us to continue to build out what we do in uh in infrastructure. and uh what that's what's more important than I'd say short-term volatility in capital markets or short-term political uh thinking.
>> I want to uh pivot a little closer to home um because you're one of the largest real estate investors in the world, particularly commercial real estate with a sizable presence uh here in New York City. Mayor elect Zoran Mdani has pledged a variety of policies that many in your industry have been concerned about. Whether it's fears uh that the policies could affect landlords or that the wealthy could flee to other states. Has the election changed the way that you invest or plan to invest in New York City?
>> So, uh as stated a second ago, we go to good places uh with good people and invest in good assets. And uh if you have those things, short-term uh periods of time don't really bother us. Uh we will live through this. The New York City's been growing and excelling and getting better for hundreds of years and uh it will continue to do that in the future. This is a great It's the deepest capital market, the largest real estate business in the world. New York City will be a great place 25 years from now.
Have you reached out to the mayor's office or the mayor himself to explain what you think the city needs in terms of real estate?
>> I'm sure some of our people have >> in terms of partnership. Okay.
Um, this is obviously a very big macro week. The FOMC meeting is tomorrow. What are you seeing across your portfolio? You have a very diversified portfolio geographically as well as uh sectorbased uh in terms of distress as well as risk appetite. And based on that, do you think that the Fed should cut rates tomorrow?
Look, rates are unduly high because they were dealing with inflation. Uh I think rates will continue to come down through 26. Uh that'll be good for capital markets. It will be good for real estate. It'll be good for real assets. Um, but the underlying fundamentals of the economy are actually pretty positive. Um, and uh and that continues today and has has been getting better. I'd say month by month, quarter by quarter. Um, but we need to interest rates should come down because they're unduly high from where they should be in a normal environment at this point in time.
>> All right. Uh, Bruce Flatt, CEO of Brookfield, thank you so much for joining us today from the Goldman Sachs Financial Services Conference here in New York City. We really appreciate your time.