Baku offers its grid to the AI build-out as BlackRock joins the pitch

Azerbaijan has spent more than a century selling energy as a commodity. At an investment forum in Baku, its digital policy chief pitched it as a service instead: electricity for the machines that run artificial intelligence.

"Energy-rich Azerbaijan is now becoming a country that provides a key element of artificial intelligence — electricity for data centers," said Fariz Jafarov, executive director of the Center for Analysis and Coordination of the Fourth Industrial Revolution, known as 4SIM, speaking at the second Azerbaijan International Investment Forum. Many countries building data centers, he said, are running into serious power shortages.

Jafarov described artificial intelligence as resting on five pillars: "electricity and critical infrastructure, data and models, the application and adaptation of AI tools across various organizations, as well as talent, education and governance." In a separate session he argued that Azerbaijan's main competitive advantage in the data center business is its regional and global connectivity rather than any single input.

A strategy, and the money in the room

The policy frame is Azerbaijan's Digital Economy Development Strategy for 2026-2029, which carries more than 50 initiatives, among them incentives meant to draw large technology hyperscalers into building data centers that serve local, regional and global markets. Jafarov tied that to a longer-term target: "One of Azerbaijan's main priorities until 2030 is to transform oil capital into human capital."

The audience matched the pitch. The State Oil Fund of Azerbaijan, known as SOFAZ, used the same forum to hold an infrastructure investment dialogue with BlackRock, organized in three sessions: artificial intelligence and digital infrastructure, energy, and transport and logistics corridors.

Economy Minister Mikayil Jabbarov and Digital Development and Transport Minister Rashad Nabiyev joined the digital panel, moderated by Charles Hatami, BlackRock's global head of financial and strategic investors. The energy session, moderated by Eric Varvel of Global Infrastructure Partners, brought in Energy Minister Parviz Shahbazov and SOCAR President Rovshan Najaf, and turned on energy security and the growing role of renewables. A third session returned to Azerbaijan's role in connecting regional markets.

The pitch has competitors next door. Uzbekistan's $7.5 billion package of wind power and data center projects in Karakalpakstan targets the same customers, and both governments are marketing a similar combination: generating capacity, land and a position between European and Asian networks.

What it means: Selling power to data centers is a sturdier business than selling gas to Europe, because the customer builds the asset on your territory and cannot relocate it when politics shift. That logic sits behind Baku's language about converting oil capital into human capital, and it explains why a sovereign wealth fund and the world's largest asset manager shared a stage with the digital ministry. The constraint is physical. Hyperscalers buy firm, cheap electricity at scale, with increasingly strict carbon terms, and a pipeline of announcements is not a grid. Whether Azerbaijan becomes an AI power supplier or another transit narrative will be decided by how much generation and interconnection it builds before this investment cycle closes.