Blackstone’s Jas Khaira says fears over AI-buildout debt are overblown
Blackstone’s AI head on why the PE giant isn't panicked by market jitters.
Private equity firm Blackstone is playing a pivotal role in the AI boom, according to Jas Khaira, a veteran at the company. During a recent presentation at TechCrunch Disrupt, Khaira discussed Blackstone's involvement in the AI sector, which includes offering loans to data centers and investing in frontier AI models and applications. Earlier this year, Blackstone launched Blackstone N1, a San Francisco-based hub for its AI initiatives, led by Khaira himself.
Khaira explained that unlike previous tech cycles, the transition to AI demands significantly more capital, which is why Blackstone's vast portfolio of $1.3 trillion in assets under management is crucial. Unlike traditional venture capitalists, Blackstone focuses on compute financing and offers flexible capital structures, including both debt and equity. The firm has been aggressively investing, with its San Francisco-based hub, Blackstone N1, playing a key role in several compute-related deals.
In one notable instance, Blackstone invested $5 billion in Crux AI, a neocloud launched in partnership with Google, which commercializes custom TPUs. The firm also backed Etched, a chip startup that has garnered attention for its rapid development. Neoclouds are cloud providers that rent out AI GPU infrastructure, and Blackstone pioneered a financing structure for these companies, allowing them to borrow massive sums based on committed customer contracts and GPUs pledged as collateral.
Despite concerns regarding the mounting debt burdens of AI infrastructure providers, Khaira downplayed the likelihood of a credit crisis. He noted that the vast majority of data centers are built for hyperscalers, and the debt backing these centers is secured by the most creditworthy companies. Blackstone is also helping companies adopt AI through a $1.5 billion joint venture with Anthropic, supplying forward-deployed engineers to assist Blackstone's 280 portfolio companies in integrating AI into their operations.
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