Blackstone is positioning itself at the center of the artificial intelligence boom, according to firm veteran Jas Khaira, who spoke last week on stage at TechCrunch Disrupt. The private equity giant is deploying capital through several routes, from large loans to data centers to stakes in frontier AI models and applications.
Earlier this year, Blackstone launched Blackstone N1 (BXN1), a San Francisco-based hub for its AI efforts. Khaira leads the group and moved from New York to be closer to the heart of the industry. He argued that, unlike earlier technology waves such as mobile and SaaS, which could scale on moderate capital, AI demands enormous investment. That, he suggested, is why a firm with $1.3 trillion in assets under management can play an important role.
Khaira said Blackstone differs from traditional venture capitalists through its focus on compute financing and its ability to offer flexible structures, from debt to equity. "We're the largest owner of compute outside of the hyperscalers today," he said, citing investments in neoclouds and data centers. Neoclouds are providers that rent out AI GPU infrastructure. BXN1 was involved in Crux AI, a neocloud launched with Google to commercialize its custom TPUs, to which Blackstone committed $5 billion as an investor. It also backed Etched, a four-year-old chip startup.
The firm helped pioneer a way of lending large sums to venture-backed neoclouds by weighing committed customer contracts and taking pledged GPUs as collateral. Its first such deal came in 2023 with CoreWeave, which sought a $2.3 billion loan soon after demand surged following ChatGPT's launch. Khaira said CoreWeave then had only "30 million of revenue and minimal profitability." Blackstone took comfort from the Nvidia GPUs backing the loan, Nvidia's role as an investor, and CoreWeave's contracts with blue-chip customers such as Microsoft. The structure became a template for billions in follow-on debt from Blackstone and other lenders. This year, Blackstone also co-led a $10 billion credit facility with Coatue for Australian GPU provider Firmus.
Khaira acknowledged that the heavy debt loads of neocloud operators have recently raised concerns. CoreWeave's debt has grown to about $50 billion. He attributed credit-market jitters to several factors: interest rates ticked up in September, hotter-than-expected inflation suggests borrowing costs could keep rising, and a flood of AI infrastructure debt offerings is adding pressure. Credit spreads have widened, he said, and even Meta and Microsoft now pay more to borrow.
The unease has reached equity markets. CoreWeave shares fell more than 20% in recent days, and Firmus scrapped a planned Australian Securities Exchange IPO at a target valuation of roughly $30 billion. "Ultimately, the market wasn't there at that valuation," Khaira said, adding that investors are weighing the right price for neoclouds as rates climb.
Even so, he said AI companies cannot get enough compute, which keeps driving data center construction. He dismissed fears of a widespread credit crisis or economic crash: "This doesn't feel like something where you've got 2008 banks that are shaky credits." Because most data centers are built for hyperscalers, he said, the debt is backed "by the most creditworthy companies in the world."
Blackstone is also working on AI adoption through a $1.5 billion joint venture, "Ode with Anthropic," formed this year with Anthropic and Hellman & Friedman. Ode supplies forward-deployed engineers to help companies integrate AI into operations, beginning with Blackstone's 280 portfolio companies. Asked whether those companies see real gains, Khaira said "there is definitely ROI, but it is uneven," describing adoption as potentially following a "sawtooth-type pattern" that skeptics may read as compute oversupply before uptake catches up.
