Blackstone's president says the firm goes big on AI bets.
They invest in data centers and related firms.
Gray expects private credit to avoid a crisis.
What happened
Jon Gray, president and COO of Blackstone, discussed the firm's AI investment strategy on The CEO Signal show, emphasizing its "go big" approach and its focus on "good neighborhoods" with thematic tailwinds.
Why it matters
Blackstone has invested heavily in AI infrastructure, including data centers and related companies, and Gray believes these bets have been lucrative. He also addressed concerns about private credit, predicting performance will be "far better than the crisis-apocalypse" scenario and that shocks to the system are helpful for testing products.
What to watch
Gray highlighted Blackstone's strategy of limiting risk by owning hard infrastructure and "picks and shovels" assets, which can be sold if conditions change, and fostering a skeptical culture to avoid falling in love with investments.
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Jon Gray's comments reveal how Blackstone applies its "good neighborhood" philosophy to AI, starting with a data center acquisition that provided insights into hyperscaler demand, leading to investments across an AI ecosystem. This approach aims to gain exposure while managing risk through owning tangible assets.
Gray's defense of private credit comes after Blackstone limited withdrawals from a credit fund earlier this year, drawing scrutiny. He draws parallels to the 2022 BREIT redemption requests, arguing that shocks are useful tests and that staying investors came out ahead. His confidence rests on Blackstone's senior lender position.
The CEO's social media presence, with his "dorky dad" videos, serves a strategic purpose: building trust with individual investors and advisers as Blackstone increasingly relies on their funding. This aligns with his view that investing is "really a trust business at the end of the day."
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