AI is a hot topic among corporate America, so it's no surprise to see it pop up on earnings calls, but on Thursday Blackstone co-founder and CEO Steve Schwarzman not only extols the technology's potential, he also laid out an ambitious goal for the private equity giant to become the largest investor in the tools and buildings that power AI.
“Blackstone aspires to be the largest AI infrastructure investor in the world,” Blackstone's chairman and CEO said on a conference call.
To explain, Schwarzman likened the transformative power of AI to a light bulb.
“I believe the impact of AI will be as profound as when Thomas Edison patented the light bulb in 1880,” he said on the conference call. “It took years to develop a commercially viable product, but the subsequent decades to build the electric grid is similar to the creation of today's data centers that are driving the AI revolution.”
Blackstone expects “roughly $1 trillion in capital spending in the U.S. over the next five years to build and fit out new data centers, and another $1 trillion in capital spending outside the U.S.,” and that the adoption of AI will “result in a 40% increase in U.S. electricity demand over the next decade, compared to modest growth over the past decade.”
“We believe these explosive trends will lead to unprecedented investment opportunities for our company,” he concluded.
Earlier this week, Blackstone announced a deal to acquire Minnesota-based TriStar, a provider of electrical equipment for backup power solutions, including for data centers.
The company recently agreed to invest about $1 billion in wind and solar projects with NextEra, the nation's largest public renewable energy developer.
“We are now focused on leveraging our large-scale platforms in building, real estate, private credit and renewable energy to address the power needs of this sector in a variety of differentiated ways,” Schwarzman said.
Blackstone's portfolio includes $55 billion in data centers, including facilities under construction, and the firm also provides equity and debt capital to AI companies, Schwarzman said.
Larry Fink, CEO of asset management firm BlackRock, is also eyeing the AI infrastructure opportunity. During the company's first-quarter earnings call in April, Fink said the firm's $12.5 billion deal Global Infrastructure Partner to the landmark acquisition of the iShares franchise 15 years ago.
He noted that BlackRock aims to be a major provider of capital for the data centers and power generation facilities needed to power AI.
“Around the world, demand for all forms of infrastructure is exponentially increasing, from communications networks to power generation to transportation hubs to data centers to new ways of securing energy,” Fink said.
