Blackstone President & COO Jon Gray Talks AI Demand

CoreWeave

Across the shows: 36 speakers in other episodes, 8 bullish and 29 bearish calls, past 30 days

• Jon Gray · BlackstoneBullish

  CoreWeave and neoclouds will find capital because compute demand and pricing power are very strong.

  Gray says neocloud economics are strong. Compute prices are up 50% from a year ago, and older H100 chips are renting near their original rates even though many expected them to be worthless after three or four years. Lease rates on contracted data centers have risen, leaving these leases in the money. He acknowledges the challenge is delivering compute and funding it: debt, equity, data center capacity and power. Neoclouds can use asset-level chip financing or raise equity, and the answer depends on each firm. If end-market demand weakened, the situation would be highly problematic, but with this much demand and pricing power he expects neoclouds to find capital. He describes CoreWeave as having an outstanding CEO.

  “Well, as long as the end product, the compute has so much demand and pricing power, I think these neo clouds will find sources of capital.”at 9:12

Anthropic

Across the shows: 39 speakers in other episodes, 22 bullish and 42 bearish calls, past 30 days

• Jon Gray · BlackstoneBullish

  An Anthropic IPO would be a real positive for markets and would lower the labs' cost of capital.

  Gray cites SpaceX as the precedent: when a large private company lists, it gets a big market cap, and rating agencies often make it investment grade. That lowers its cost of capital. He says a key challenge for the big labs is that they have relied on hyperscalers for data center leasing and chip financing. A public listing with its own market cap and credit rating would let Anthropic borrow more easily and cheaply, which reduces pressure on the system. He says more capital entering the AI system would help, while noting the market will watch deployment and the pace of demand growth.

  “Well, I think an anthropic IPO would be a real positive for the market because as we saw with SpaceX, when you get one of these large private companies public, they get a big market cap.”at 10:46

Middle East & Iran

• Jon Gray · Blackstone

  Resolving the Middle East and Russia-Ukraine conflicts would ease Fed pressure and reduce inflation.

  Gray says the firm is assuming a choppy world for a while, with the energy shock and higher rates from the conflicts. Energy prices rose 30% in the quarter and rates rose 80 basis points, slowing deal activity. He argues that a resolution of either or both conflicts, in Russia-Ukraine or the Middle East, would be very helpful. He says it would ease pressure on the Fed and other central banks and bring down inflationary pressures, which would reopen the capital markets.

  “If you had a resolution of either or both of the conflicts in Russia, Ukraine, or The Middle East, that would be very helpful out there. I think it would ease pressure on the Fed and other central banks and take inflationary pressures down.”at 4:23

US growth & recession risk

• Jon Gray · Blackstone

  Investors overlook the underlying strength of the US economy, which is driving strong corporate earnings growth.

  Gray says the market is near-term choppy due to geopolitics and rates, but people are forgetting the underlying economic strength in the US. He supports this with the earnings momentum in Blackstone's private equity portfolio, which posted 10% revenue growth and expanding margins. He says this strength should lead to a better capital markets environment once things settle.

  “I think the thing people are forgetting about is the underlying economic strength, in The United States.”at 4:23

Private equity

• Jon Gray · Blackstone

  Private equity portfolio companies are growing revenue about 10% with margins expanding, driving strong earnings.

  Gray points to Blackstone's private equity portfolio companies as evidence of underlying economic strength. They posted 10% revenue growth, margins continue to expand, and that combination produces very strong earnings growth. He argues this strength is what will eventually show through in better capital markets once the environment settles.

  “Globally, our companies in private equity had 10% revenue growth. Margins continue to expand. And when you get that, you get that kind of very strong earnings growth.”at 4:49

AI bubble & tech valuations

• Jon Gray · Blackstone

  AI is not a 1990s-style bubble: demand is near-parabolic and supply is the binding constraint.

  Gray rejects the bubble comparison. A classic bubble means building capacity and hoping demand arrives, as telecom fiber did in the 1990s with heavy leverage, and it ended poorly. He argues AI is different: capacity is being built against demand that already exists. At Blackstone's portfolio companies, spending on models is up 20-fold year on year. Anthropic co-created Ode, a company deploying AI that cannot keep up with customer demand, and personalized agents add further demand, so he calls demand almost parabolic. The risk he points to is on the supply side, where entitlements, power, chips and capital are slowing delivery. He concludes there is an indisputable shortage of compute.

  “So we see it a little bit differently. I would say when you think about a bubble, you think about building capacity and then hoping the demand comes. With AI, you're building capacity, and you're hoping you can keep up with the demand.”at 5:38

AI infrastructure & data centers

• Jon Gray · Blackstone

  Compute supply is struggling to keep up with demand; there is an indisputable shortage of compute.

  Gray says supply, not demand, is the constraint on AI. Delivery is slowed by entitlements, power, chips and the capital needed to build. Blackstone focuses on this layer, building long-term energy assets and data centers contracted to the largest companies. He calls the shortage of compute indisputable and says delivering that compute is hard. He presents this scarcity as the reason excess capacity, the usual sign of a bubble, is not being built.

  “It's governed by a lot of things that are slowing down delivery. So getting entitlements, getting power, getting chips, amassing the capital, that's meaning that supply is struggling to keep up with this demand.”at 6:47

IPOs, M&A & deal activity

• Jon Gray · Blackstone

  US IPO volume is up threefold this year, but choppy markets have narrowed the window and delayed deals.

  Gray says the year-to-date US IPO volume is up roughly 3.5 times, so the call that 2026 would be the year of the IPO is coming true on paper. Blackstone brought five companies public, three in the US and two in India. He says delays have narrowed the window because of choppy markets and the geopolitical backdrop. He expects the window to stay tougher until geopolitical conditions stabilize. He says the IPO window will reopen once stability returns and earnings strength shows through in public and private markets. If Anthropic's IPO completes, total volume would rival 2021.

  “Year to date, I think IPO volume in The US is up three and a half fold. If anthropic gets done, the total volume will rival 2021.”at 12:00