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Akbar Novruz

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In Davos, where global capital tends to sniff out the future before it becomes obvious, Azerbaijan has made a telling move. On the margins of the World Economic Forum, President Ilham Aliyev met Larry Fink, BlackRock’s chief executive, and Adebayo Ogunlesi, the founder of Global Infrastructure Partners (GIP), to formalise what Baku hopes will be more than a financial partnership. The memorandum of intent signed between the State Oil Fund of Azerbaijan (SOFAZ), BlackRock and GIP signals a strategic wager: that infrastructure, digital as much as physical, will define the country’s next phase of relevance.

At first glance, the numbers are modest by BlackRock standards. SOFAZ is considering commitments of up to $1.5bn over the next three to four years, a rounding error for a firm that now oversees around $14trn in assets following its acquisition of GIP in late 2024. Yet scale is not the point. What matters is access, to capital, to operating expertise and to the institutional discipline that global infrastructure investors increasingly demand.

BlackRock, the world’s largest asset manager with roughly $14 trillion under management, has in recent years pushed deeper into private infrastructure markets. Its acquisition of GIP, formed in 2006 and notable for stakes in London Gatwick and other major airports, signalled not just scale but operational muscle.

That muscle is now flexing around digital and energy infrastructure. Investment vehicles such as the AI Infrastructure Partnership, which includes BlackRock, GIP, Microsoft, Nvidia, and Abu Dhabi’s MGX, are mobilising tens of billions, potentially hundreds, to build data centres and supporting power networks to fuel artificial intelligence growth. Deals reported on the order of $40 billion for operators like Aligned Data Centers illustrate just how capital-intensive the digital future has become.

For a country perched at the nexus of Europe and Asia, this global shift presents a rare opportunity. Azerbaijan’s old narrative was framed by oil and gas; the new one is being written in bits and bytes. Under the Davos agreement, SOFAZ will explore investments not only in global infrastructure funds managed by GIP, but in data centres and cloud infrastructure that could serve the wider region, a recognition that the next frontier of growth lies in connectivity and computing power, not barrels.

For Azerbaijan, this aligns neatly with its own ambitions. Long defined by hydrocarbons and transit corridors, the country is now positioning itself as a regional platform for digital connectivity. Among the priority areas under discussion with GIP are data centres and supporting infrastructure capable of serving not just domestic demand but a wider regional cloud and AI market. Energy-hungry servers, after all, need reliable power and stable grids, two assets Azerbaijan is keen to market alongside its geography.

The partnership sits on an existing foundation. SOFAZ’s earlier co-investment with GIP in London’s Gatwick Airport, a £50 million investment already at stake in one of Europe’s busiest gateways, hinted at the fund’s evolving strategy of diversifying beyond hydrocarbons into assets that combine durability with strategic relevance.

GIP’s track record is similarly broad: from transport hubs to energy networks and digital platforms, its expertise in managing complex infrastructure assets will be a resource for Baku as it seeks to marry physical connectivity with digital resilience.

Crucially, the memorandum foresees the creation of sectoral working groups, technical sessions and expert exchanges, the scaffolding upon which the realisation of multi-billion-dollar projects will likely depend. These mechanisms are not novel in theory, but they signal an intention to mirror international operating standards rather than pursue isolated domestic projects.

The broader context makes this cooperation more than a Davos photo-op. Across global capital markets, infrastructure is being rethought as a tactical asset class. Governments are struggling with budget constraints, and private capital increasingly funds everything from fibre networks to renewable grids. BlackRock’s push into infrastructure, amplified by its acquisition of GIP, which manages over $100 billion in infrastructure equity and credit, reflects confidence in long-term returns from essential assets.

For Azerbaijan, the strategic calculus is clear: aligning with a global institutional investor enhances risk management, governance discipline, and access to co-investment partners. It also signals to other investors that Baku is open for serious business, not just in hydrocarbons and transport corridors, but in sectors tied to the digital economy.

There are potential pitfalls. Mobilising capital across borders requires navigational skill in regulatory, political and market risks, especially for projects intended to serve multiple jurisdictions. The risk, as ever, is that ambition outruns execution, a familiar Davos problem. But in an era when sovereign wealth funds increasingly compete for influence through infrastructure rather than arms or pipelines, Azerbaijan’s move is less surprising than it might once have been.