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Blackstone

Blackstone's Jon Gray Addresses 700+ Clients | May 2026

29m · Transcribed via assemblyai · Watch on YouTube

Jon Gray (President & COO, Blackstone) addressing 700+ LPs across a firm of **270 portfolio companies and 13,000 real estate assets** — the most direct private-markets read in this week's cohort, and the one that matters most to a CRE desk. The throughline: the AI-infrastructure buildout is **'the best risk adjusted way for us to play it'**, and the scarcity is now on the supply side, not the capital side. Gray sizes the wave hard: *'$800 billion is going to be spent by five companies'*; Blackstone alone expects to sign **6 gigawatts of data-centre leasing this year — '6 gigawatts is $100 billion of data centers. Another 200 billion of chips that the hyperscalers will put in. $300 billion is the size of the Finland economy.'** Against the bubble worry he inverts it: *'everybody talks about is there overbuilding... I would argue today the opposite is the risk'* — the binding constraints are *'the shortage of power, the shortage of turbines, the shortage of memory chips and the almost exponential growth in demand'*, which is the same multi-year memory/power shortage [Cerebras and the memory cohort flagged last week](/issues/2026-05-31). **The CRE-specific call:** real estate *'is going to really get a tailwind here'* after four years as *'one of the least bubbly parts of the economy'*, with **logistics his favourite part of the ecosystem** and debt costs falling into a supply-starved development pipeline. The honest counterweight is **software**: a *'resetting of multiples lower'* is now *'a fact of life'* — he wouldn't underwrite *'the 20 times multiples that existed 12 months ago'*, took **significant Q1 markdowns on growth-equity software (6.5% of the firm)**, and — pointed, for Jack — flagged *'what is a billable hour at a law firm going to be? I'm not sure.'* On exits he stands by **2026 as 'the year of the IPO'**, betting two of SpaceX / Anthropic / OpenAI list this year. On credit he defends private credit as structurally *less* levered than the bank-to-CLO chain it replaces and tips **investment-grade AI-infrastructure financing as the 'most explosive growth' ahead.** Net: a builder of the picks-and-shovels layer telling his own clients where the scarcity rents — and the disruption losses — will land.

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$800 billion is going to be spent by five companies. Daniel Gross is going to be up here responsible for the capex spend and infrastructure and Metta. That's an enormous amount of money. Little old Blackstone. With our leasing in data centers, we think this year we'll sign 6 gigawatts. 6 gigawatts is $100 billion of data centers. Another 200 billion of chips that the hyperscalers will put in. $300 billion is the size of the Finland economy.

Jon Gray · 0:25

now everybody talks about is there overbuilding? That's a big risk, Is there a lot of capital? I would argue today the opposite is the risk that the political pushback which is growing, that the shortage of power, the shortage of turbines, the shortage of memory chips and the almost exponential growth in demand means these data centers, once you get them built, are going to be incredibly valuable.

Jon Gray · 5:16

I think real estate is going to really get a tailwind here. As people look for terra firma, they're nervous about the disruption, they're nervous about dislocation. There's been this sharp decline in new building debt costs have come down and then I think capital will begin to rediscover this area. It has certainly been a laggard for the last four years. One of the least bubbly parts of the economy, I would say. Logistics is my favorite part of the real estate ecosystem.

Jon Gray · 5:16

What's the market hold there is that there are hundreds of billions of data centers being built. There are going to be trillions ultimately I think, and yet there's no natural home for them today. These are great long term assets. You know, they're leased to the biggest companies in the world.

Jon Gray · 10:42

But I wouldn't assume the 20 times multiples that existed 12 months ago for many of these businesses because they were seen as safe. Recurring revenues are going to persist even though on the ground today our portfolio companies are continuing to perform very well both in credit and in private equity. We all know it's going to be a more challenging time going forward. I think we have to accept lower multiples.

Jon Gray · 14:32

We took pretty significant markdowns in the first quarter against our private equity growth equity holdings in software. Fortunately, as a firm it's six and a half percent of what we do overall. Nevertheless, this is, this is real.

Jon Gray · 14:32

And if your model is based on per seat pricing, right, and you're no longer using seats, you're dealing with agents, you need a different business. By the way, it's not that different than what is a billable hour at a law firm going to be? I'm not sure.

Jon Gray · 18:23

the three biggest private companies in the world are likely, probably two of them go public this year between SpaceX, Anthropic and OpenAI. But more broadly, the market away from those AI impacted companies I think will still be pretty good.

Jon Gray · 23:00

the traditional system, and we're a huge CLO player too, is basically a 13 time levered bank, essentially sells through some holding and flipping whatever to an 11 times leveraged CLO. That's what it is. And this model has us use your capital and either do it on an unleveraged basis or often one times or lower leverage. That is not risk to the financial system.

Jon Gray · 19:31

I think where you're going to see the most explosive growth is on the investment grade side, particularly providing capital to this really, this revolution, this AI infrastructure buildout, because you need private capital, the flexibility, the structure to do the scale of what's coming and to do it in a way that's different than liquid markets for these huge development projects.

Jon Gray · 19:31

what is going to happen to lots of professional services businesses, information services businesses, software businesses? We remember what happened to the yellow pages 20 plus years ago. That's now going to happen in a whole range of industries.

Jon Gray · 0:25

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