Related: Related aims to raise up to $8 billion for AI data-center bet

New York property developer The Related Cos., known for its work building Hudson Yards, is betting big on demand for data centers with a new business to invest in the infrastructure for artificial intelligence and hyperscale technology firms.Related is seeking to raise as much as $8 billion in capital for the venture, called Related Digital, according to a statement Thursday. Morgan Stanley is advising on the first phase of that work, with initial capital expected to be committed in the second half of the year.The property developer and some of its investors are contributing a minimum of $500 million to the effort, according to the statement. Its first North American data center project is located in Ontario, Canada, and is expected to be delivered to a hyperscale customer starting this summer.Related has a pipeline of data centers that would consume more than 5 gigawatts of power across the US and Canada, a $45 billion opportunity, according to the statement. One gigawatt is about the output of a single nuclear reactor and can provide energy to approximately 750,000 homes.The race to build data centers has accelerated over the past few years, with tech giants including Amazon, Google and Microsoft Corp. as well as data-center developers such as Equinix and Blackstone's QTS spending billions to develop the facilities. When artificial intelligence moved from a futuristic product to a mainstream obsession with the introduction of OpenAI's ChatGPT in late 2022, the push to build data centers accelerated."What we saw was this incredible demand for data center development by tech companies," Jeff Blau, Related's chief executive officer, said in an interview. "The demand is so great, and we have all the execution capabilities."Related's projects include a Chicago campus that was a former US Steel South Works site along Lake Michigan, as well as other projects across Illinois, Missouri and Wyoming.The firm has hired Brent Behrman, formerly an executive at data-center developer CyrusOne, as chief investment officer of Related Digital. The venture also hired Greg Myers, previously at Vista Equity Partners, as chief financial officer.The competition to build the data centers that run AI operations has roiled the energy industry. Power companies that provide the facilities with ever-increasing amounts of electricity are rushing to develop new plants and transmission lines.Certain developers have indicated interest in building data center campuses that consume up to four or five gigawatts of electricity, which is akin to entire cities.Some utilities have extended the amount of time data centers have to wait for power, putting pressure on developers to ink deals that guarantee their projects have a reliable source of electricity.Related has experience as a major property developer, having built massive mixed-use complexes such as Hudson Yards in Manhattan and the 78 in Chicago. The firm is also affiliated with energyRE, a renewable energy business.Related Digital's investment activities will be led through Related Fund Management, an affiliate of Related Cos. and a real estate private equity and credit investment manager.Related is vertically integrated, meaning the business can handle everything from development and management to finance, according to Blau. When kickstarting the data-center push, the company sought to line up power deals right away, he said."We took this team we put together and immediately went around country, met with utilities and different sources around the country, and found pockets of power still remaining around the grid and tied up that power as fast as we possibly can," Blau said.