(Bloomberg) -- Blackstone Inc. is expanding its bet on data centers through a new venture with Digital Realty Trust Inc.

The two companies will seek to develop four data-center campuses located in Frankfurt, Paris and Northern Virginia, with an estimated cost of about $7 billion spread over the next several years, according to a statement Thursday. Blackstone will have an 80% stake and contribute $700 million in capital initially, while Digital Realty will own 20% and manage development and day-to-day operations.

Blackstone has cited the “AI arms race” that’s fueling demand for data centers. The properties generally house servers and routers to support technology such as cloud services and often require vast amounts of power to run.

“Data centers are experiencing once-in-a-generation demand growth, driven by cloud adoption and the AI revolution,” Blackstone President Jon Gray said in the statement.

The alternative asset manager struck a deal in 2021 to buy data-center owner QTS Realty Trust for about $10 billion including debt. In a letter in late October, Blackstone Real Estate Income Trust, an investment vehicle for wealthy individuals, said that 8% of its portfolio had exposure to data centers and the properties were the biggest contributor to returns this year.

The Digital Realty partnership will close in two stages during the first half of 2024, the companies said. The Wall Street Journal reported the partnership earlier.

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