Morgan Stanley Infrastructure Partners (MSIP) is investing in data center developer Flexential as demand for AI and high-performance computing grows.

MSIP is partnering with existing investor GI Partners “to accelerate Flextential’s growth and to support its mission to meet increasing demand for digital infrastructure,” the companies said Oct. 21.

Flexential owns a network of over 40 data centers and 325 megawatts of capacity built or in development across the U.S.

The company is “poised for significant growth from enterprise digital transformation, cloud adoption and the emerging needs of hyperscale and AI workloads,” Flexential said.

Players along the entire energy value chain—from upstream gas producers to infrastructure developers—see opportunity for growing demand to fuel AI and other forms of energy-sucking computing.

Producers argue that future data center projects should be sited in geographies with access to low-cost natural gas, like Appalachia or the Permian Basin.

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“We believe Flexential's robust next-generation infrastructure, commitment to innovation, and proven leadership in the industry make it well-positioned to capitalize on market opportunities,” said Christopher Ortega, MSIP’s head of Americas.

MSIP will invest in the common equity of Flexential as a co-control investor alongside GI Partners. The two firms will provide “a substantial amount of primary capital to fund continued expansion and growth,” per the announcement.

The transaction is expected to close in the fourth quarter.

Kirkland & Ellis LLP acted as legal counsel to MSIP. Citi acted as lead financial advisor for MSIP; Evercore also served as financial advisor.

Flexential was represented by Ropes & Gray LLP as legal counsel. Goldman Sachs served as exclusive financial advisor to Flexential and GI Partners.

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