Market Views
Private Markets in the Age of AI: How Blackstone Is Investing for the Next Era
June 29, 2026
Market Views: The AI Ecosystem, IPOs, and Real Estate
Market Views: The AI Ecosystem, IPOs, and Real Estate
Jon Gray, Blackstone President & COO: Can I go? All right. Welcome to Market Views. We're gonna make it fun this time. It's always fun, right?
Jay Gillespie: 30 seconds, biggest deals, go.
Jon Gray: 30 seconds. Most important deals of the quarter. We did a big partnership with Google and TPUs to create a company. We created a company with Anthropic called Ode to deploy their technology. We did big financing partnership with Broadcom. We've taken three companies public, including BXDC, our data center REIT. I think today we're going to get one done with Jersey Mike's. We did an renewables company in Europe called EuroWin. We did aerospace company called Senior. There's a zillion things we did here. We sold a bunch of data centers to Digital Realty, who's been an amazing partner. We did a big partnership with Williams Company around energy for data centers. We have a lot of things going on. I could keep going. Did I do it in 30 seconds?
Jay Gillespie: No, not even close.
Jon Gray: Okay, sorry. My economic weather report is pretty positive. I'd say it's pretty sunny, a few clouds. That's obviously tied to the war, which is driving energy prices higher. And interest rates higher. But despite that, we've seen remarkable performance from our private equity businesses, which are reflective, I think, of economic activity. Growth was 11% in revenue in the quarter, even stronger in the United States.1 And it's really being powered by this huge investment spend tied to AI and AI infrastructure. And that feels like it's got a long way to run. Once you can track to build a gigawatt data center. That means you're spending 15 billion for a data center, $35 billion to buy chips. You're probably contracting for a very large power plant as well. And so that creates a lot of economic activity and that's really creating strength in the economy. Weakness in Europe, weakness in the housing market with elevated rates, but overall I would say a pretty good picture.
So I think about AI as almost a new operating system for the global economy. How we live our lives, how businesses function. I know there are a lot of people who are impatient. They're saying, gosh, this is taking so long. There's wasted tokens. I'm not gonna discount that there's not gonna be misallocations of capital. There are people who're doing things that may not turn out to have high returns, but I think the impatience is a little misplaced. It takes some time for the applications to happen. It takes time. If you've been running your internal finance department a certain way for 40 years to change that. So this technology is gonna start to work its way into lots of areas. And we're seeing more and more examples of this. A company like Chamberlain that does garage door openers can create a digital doorman that is a whole new product that today out of nowhere has $40 million of revenue and they're anticipating it'll grow to $500 plus million of revenue here over the next four or five years. To me, that's what the potential of AI is, giving customers better products at better prices and generating revenue. And it's creating a whole new world we can't anticipate.
We are investing across the entire AI ecosystem. And it really started when we bought QTS for $10 billion. This was a major data center company in the United States. And after the launch of ChatGPT, We began to see demand showing up at QTS from some of the biggest hyperscale companies who wanted more compute (Figure: US Data Center Construction Spending).2 And as this began to grow, we began to say, huh, there's opportunity here. Maybe we should invest more in energy, in pipelines and renewables because these things need a lot of power. Maybe we shouldn't invest in electrical equipment because the grid is going to need to be expanded. Then we began to invest in neoclouds, which are companies that provide data centers as well as GPUs. And we did this in the form of debt and equity. And we began lending much more by the way to this ecosystem on the energy side, on the GPU side, on the data center side. We started investing in the foundational model companies in the Anthropics and Open AIs, SpaceX, which houses XAI. Which we did in our wealth platform, really across this whole area. And we've even done some things derivative. We bought three hotels in the San Francisco Bay Area, which are obviously benefiting from this resurgence of demand tied to AI. Now you've got to do it in a really responsible way. Much of what we're doing is sort of picks and shovels. It's long-term contracted. It's based on the credit worthiness of very large, lowly leverage companies. But it plays off of what is happening here, which is a fundamental shortage of compute and then a desire to apply that compute to the broader economy.
We said 2026 would be the year of the IPO. I'm feeling pretty good about that right now. IPO volume's up six-fold (Figure: US IPO Volumes).3 Obviously SpaceX helped, but we at Blackstone have done a number of IPOs, high-quality businesses. Are getting a good reception in the public markets and like a magnet that'll pull more companies in. And so I'm pretty optimistic that this trend continues for the balance of the year.
Are hedge funds back? I think they never went away, but yes, I think in terms of the consciousness of investors, Ithink there's much more openness to hedge funds. Not necessarily when they first came out, the idea was they're gonna beat the stock market with full downside protection, long short equity. I don't think that's what it's about today. I think their objective today is to deliver an attractive absolute return, a premium to what liquid 60 40 produces, meaning 60 percent stocks, 40 percent bonds, downside protection so you don't have the volatility of the markets and liquidity that's different, better than what you get in private assets. That combination is really what individual investors and institutions are looking for.
Well, I'd say the real estate cycle has been longer than most people would have anticipated. And I think part of it is the rate rise was very dramatic, which hit the sector. Obviously, office buildings got hit pretty hard by COVID and remote work. And the sort of normalization of rates has taken longer, particularly the last two years with Liberation Day and now the war. But what we're beginning to see are some real green shoots. Look, it's all about supply and demand, ultimately in real estate. New supply is down 60% in the major real estate asset classes in the US from the peak (Figure: Construction Starts: Today vs. Recent Peak).4 And on the demand side, the healthy economy is really driving demand. So if you look at logistics, our Link Logistics platform has begun to grow rents and occupancies, which is a very good sign.5 So we're seeing strong fundamentals there. We've seen a pickup in the hotel business that's gone from negative same-store sales last year to positive mid-single digits. We're even seeing office markets improve. In New York, vacancy has come down from 21.5% to 14.5%.6 And so based on that supply-demand dynamic, even if rates stay elevated here, I think you'll begin to see a tailwind in values.
Can I do a quick commercial? Yes, sure. We're doing a new podcast called Inside Blackstone. Hosted by my partner Christine Anderson. She's got a bunch of amazing guests and it's gonna be shockingly about insights that are coming from inside Blackstone. What we're seeing from our portfolio companies, what we're learning from our people here and some of the amazing people who come to the building and we're gonna have them on as guests and we gonna try to keep it lively and interactive and I'm excited for it. So I'll probably participate a bit, but mostly just watch.
The big picture is... That we're in the midst of a powerful technology transformation. And we as a firm have leaned into that in every element of it, particularly around the infrastructure, the compute, the data center, the chips, the energy. We're really uniquely positioned at this intersection of AI in the physical world. And I think it's going to make an enormous difference for our investors. The strategic decision we made here. Is going to lead to them, we believe, higher returns, better outcomes. And that makes me feel very good. And in the second quarter, you just got to see a little piece of that. I think you're gonna see much more over time. Market Views, out. See you next quarter.
Notes:
1. Global portfolio: 2Q26 Flash Macro data (as of July 16) from 80 BCP portfolio companies; FMV-weighted % change with company percentages capped at 100%. US Portfolio: 2Q26 Flash Macro data (as of July 16) from 44 BCP portfolio companies; FMV-weighted % change with company percentages capped at 100%.
2. US Census Bureau, as of May 2026.
3. Dealogic, Global & US-Listed Equity & Equity-Linked issuance from 01/01/2025 – 06/30/2026; Notional issuance figures are in $bn. IPO data inclusive of SPACs and A-shares.
4. US Multifamily: RealPage Market Analytics. Figure reflects 2025 starts vs. recent peak (2022). Represents institutional-quality product across RealPage Market Analytics Top 150-tracked markets (excludes New York City). US Logistics: CoStar. Figure reflects 2025 starts vs. recent peak (2022).
5. 26% Link Logistics YoY total same-store leasing volume as of June 30, 2026.
6. CoStar, as of June 30, 2026. Based on Class A buildings greater than 100k sf, excluding owner-occupied buildings. Reflects availability, which captures space actively marketed for lease, including space committed for future occupancy (e.g., pre-leased developments).
End disclosure:
Neither this video nor any of the information contained herein constitutes an offer to sell, or a solicitation of an offer to buy, any security, Blackstone fund or other investment vehicle or strategy. Past performance does not predict future returns, and there is no assurance that any Blackstone fund will achieve its objectives or avoid significant losses. This video may contain forward-looking statements, which are subject to various risks and uncertainties, and actual events or results or the actual performance of any investments may differ materially from those reflected or contemplated herein. Statements contained herein are based on current expectations, estimates, opinions, and/or beliefs of Blackstone or third parties as of the date of the recording and should not be construed as research or investment advice. There can be no assurance that views and opinions expressed in this recording will come to pass and are subject to change. There can be no assurances that any of the trends described herein will continue or will not reverse.
For information about Blackstone's business, including risks and financial information, please refer to our most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Additional information is available here at http://ir.blackstone.com. This video is owned by Blackstone and may not be downloaded, recorded or reused in any way without Blackstone’s express consent.
Jay Gillespie: 30 seconds, biggest deals, go.
Jon Gray: 30 seconds. Most important deals of the quarter. We did a big partnership with Google and TPUs to create a company. We created a company with Anthropic called Ode to deploy their technology. We did big financing partnership with Broadcom. We've taken three companies public, including BXDC, our data center REIT. I think today we're going to get one done with Jersey Mike's. We did an renewables company in Europe called EuroWin. We did aerospace company called Senior. There's a zillion things we did here. We sold a bunch of data centers to Digital Realty, who's been an amazing partner. We did a big partnership with Williams Company around energy for data centers. We have a lot of things going on. I could keep going. Did I do it in 30 seconds?
Jay Gillespie: No, not even close.
Jon Gray: Okay, sorry. My economic weather report is pretty positive. I'd say it's pretty sunny, a few clouds. That's obviously tied to the war, which is driving energy prices higher. And interest rates higher. But despite that, we've seen remarkable performance from our private equity businesses, which are reflective, I think, of economic activity. Growth was 11% in revenue in the quarter, even stronger in the United States.1 And it's really being powered by this huge investment spend tied to AI and AI infrastructure. And that feels like it's got a long way to run. Once you can track to build a gigawatt data center. That means you're spending 15 billion for a data center, $35 billion to buy chips. You're probably contracting for a very large power plant as well. And so that creates a lot of economic activity and that's really creating strength in the economy. Weakness in Europe, weakness in the housing market with elevated rates, but overall I would say a pretty good picture.
So I think about AI as almost a new operating system for the global economy. How we live our lives, how businesses function. I know there are a lot of people who are impatient. They're saying, gosh, this is taking so long. There's wasted tokens. I'm not gonna discount that there's not gonna be misallocations of capital. There are people who're doing things that may not turn out to have high returns, but I think the impatience is a little misplaced. It takes some time for the applications to happen. It takes time. If you've been running your internal finance department a certain way for 40 years to change that. So this technology is gonna start to work its way into lots of areas. And we're seeing more and more examples of this. A company like Chamberlain that does garage door openers can create a digital doorman that is a whole new product that today out of nowhere has $40 million of revenue and they're anticipating it'll grow to $500 plus million of revenue here over the next four or five years. To me, that's what the potential of AI is, giving customers better products at better prices and generating revenue. And it's creating a whole new world we can't anticipate.
We are investing across the entire AI ecosystem. And it really started when we bought QTS for $10 billion. This was a major data center company in the United States. And after the launch of ChatGPT, We began to see demand showing up at QTS from some of the biggest hyperscale companies who wanted more compute (Figure: US Data Center Construction Spending).2 And as this began to grow, we began to say, huh, there's opportunity here. Maybe we should invest more in energy, in pipelines and renewables because these things need a lot of power. Maybe we shouldn't invest in electrical equipment because the grid is going to need to be expanded. Then we began to invest in neoclouds, which are companies that provide data centers as well as GPUs. And we did this in the form of debt and equity. And we began lending much more by the way to this ecosystem on the energy side, on the GPU side, on the data center side. We started investing in the foundational model companies in the Anthropics and Open AIs, SpaceX, which houses XAI. Which we did in our wealth platform, really across this whole area. And we've even done some things derivative. We bought three hotels in the San Francisco Bay Area, which are obviously benefiting from this resurgence of demand tied to AI. Now you've got to do it in a really responsible way. Much of what we're doing is sort of picks and shovels. It's long-term contracted. It's based on the credit worthiness of very large, lowly leverage companies. But it plays off of what is happening here, which is a fundamental shortage of compute and then a desire to apply that compute to the broader economy.
We said 2026 would be the year of the IPO. I'm feeling pretty good about that right now. IPO volume's up six-fold (Figure: US IPO Volumes).3 Obviously SpaceX helped, but we at Blackstone have done a number of IPOs, high-quality businesses. Are getting a good reception in the public markets and like a magnet that'll pull more companies in. And so I'm pretty optimistic that this trend continues for the balance of the year.
Are hedge funds back? I think they never went away, but yes, I think in terms of the consciousness of investors, Ithink there's much more openness to hedge funds. Not necessarily when they first came out, the idea was they're gonna beat the stock market with full downside protection, long short equity. I don't think that's what it's about today. I think their objective today is to deliver an attractive absolute return, a premium to what liquid 60 40 produces, meaning 60 percent stocks, 40 percent bonds, downside protection so you don't have the volatility of the markets and liquidity that's different, better than what you get in private assets. That combination is really what individual investors and institutions are looking for.
Well, I'd say the real estate cycle has been longer than most people would have anticipated. And I think part of it is the rate rise was very dramatic, which hit the sector. Obviously, office buildings got hit pretty hard by COVID and remote work. And the sort of normalization of rates has taken longer, particularly the last two years with Liberation Day and now the war. But what we're beginning to see are some real green shoots. Look, it's all about supply and demand, ultimately in real estate. New supply is down 60% in the major real estate asset classes in the US from the peak (Figure: Construction Starts: Today vs. Recent Peak).4 And on the demand side, the healthy economy is really driving demand. So if you look at logistics, our Link Logistics platform has begun to grow rents and occupancies, which is a very good sign.5 So we're seeing strong fundamentals there. We've seen a pickup in the hotel business that's gone from negative same-store sales last year to positive mid-single digits. We're even seeing office markets improve. In New York, vacancy has come down from 21.5% to 14.5%.6 And so based on that supply-demand dynamic, even if rates stay elevated here, I think you'll begin to see a tailwind in values.
Can I do a quick commercial? Yes, sure. We're doing a new podcast called Inside Blackstone. Hosted by my partner Christine Anderson. She's got a bunch of amazing guests and it's gonna be shockingly about insights that are coming from inside Blackstone. What we're seeing from our portfolio companies, what we're learning from our people here and some of the amazing people who come to the building and we're gonna have them on as guests and we gonna try to keep it lively and interactive and I'm excited for it. So I'll probably participate a bit, but mostly just watch.
The big picture is... That we're in the midst of a powerful technology transformation. And we as a firm have leaned into that in every element of it, particularly around the infrastructure, the compute, the data center, the chips, the energy. We're really uniquely positioned at this intersection of AI in the physical world. And I think it's going to make an enormous difference for our investors. The strategic decision we made here. Is going to lead to them, we believe, higher returns, better outcomes. And that makes me feel very good. And in the second quarter, you just got to see a little piece of that. I think you're gonna see much more over time. Market Views, out. See you next quarter.
Notes:
1. Global portfolio: 2Q26 Flash Macro data (as of July 16) from 80 BCP portfolio companies; FMV-weighted % change with company percentages capped at 100%. US Portfolio: 2Q26 Flash Macro data (as of July 16) from 44 BCP portfolio companies; FMV-weighted % change with company percentages capped at 100%.
2. US Census Bureau, as of May 2026.
3. Dealogic, Global & US-Listed Equity & Equity-Linked issuance from 01/01/2025 – 06/30/2026; Notional issuance figures are in $bn. IPO data inclusive of SPACs and A-shares.
4. US Multifamily: RealPage Market Analytics. Figure reflects 2025 starts vs. recent peak (2022). Represents institutional-quality product across RealPage Market Analytics Top 150-tracked markets (excludes New York City). US Logistics: CoStar. Figure reflects 2025 starts vs. recent peak (2022).
5. 26% Link Logistics YoY total same-store leasing volume as of June 30, 2026.
6. CoStar, as of June 30, 2026. Based on Class A buildings greater than 100k sf, excluding owner-occupied buildings. Reflects availability, which captures space actively marketed for lease, including space committed for future occupancy (e.g., pre-leased developments).
End disclosure:
Neither this video nor any of the information contained herein constitutes an offer to sell, or a solicitation of an offer to buy, any security, Blackstone fund or other investment vehicle or strategy. Past performance does not predict future returns, and there is no assurance that any Blackstone fund will achieve its objectives or avoid significant losses. This video may contain forward-looking statements, which are subject to various risks and uncertainties, and actual events or results or the actual performance of any investments may differ materially from those reflected or contemplated herein. Statements contained herein are based on current expectations, estimates, opinions, and/or beliefs of Blackstone or third parties as of the date of the recording and should not be construed as research or investment advice. There can be no assurance that views and opinions expressed in this recording will come to pass and are subject to change. There can be no assurances that any of the trends described herein will continue or will not reverse.
For information about Blackstone's business, including risks and financial information, please refer to our most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Additional information is available here at http://ir.blackstone.com. This video is owned by Blackstone and may not be downloaded, recorded or reused in any way without Blackstone’s express consent.
What does Blackstone’s position as one of the largest private capital providers to the AI ecosystem tell us? Jon Gray discusses how we’re still in the early days of this transformation, creating opportunities for investing in AI — from energy to chips to the frontier model companies themselves.
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