Blackstone Stands Firm on Data Center Investments Amid AI Disruption
Blackstone has reaffirmed its confidence in data center investments despite concerns over China’s DeepSeek, a low-cost artificial intelligence (AI) model. The alternative asset manager, which holds $80 billion worth of leased data centers, stressed that physical infrastructure remains essential for AI development.
The company described its approach as “very prudent” and highlighted strong partnerships with leading global firms. Data centers are critical for storing, processing, and analyzing vast amounts of data, making them indispensable for AI training and operations.
AI Boom Expected to Boost Data Center Demand
The growing adoption of AI is expected to drive demand for data centers, benefiting major investors like Blackstone. However, DeepSeek’s emergence has sparked debates about whether a more affordable AI model could slow investment in infrastructure.
Blackstone President and Chief Operating Officer Jonathan Gray addressed these concerns in a post-earnings call. While monitoring DeepSeek’s impact, he remains optimistic that lower AI costs will encourage broader adoption, ultimately increasing demand for data centers.
“As usage goes up significantly, there’s still a vital need for data centers. We still think it’s a very important segment,” Gray stated.
Tech Giants Defend AI Spending
Blackstone’s stance aligns with analysts at Jefferies, who dismissed concerns that cloud computing giants would cut capital expenditure due to DeepSeek. “We would be surprised to see hyperscalers slow their capex plans as the AI space just got even more competitive,” Jefferies analysts noted.
Meanwhile, CEOs of Microsoft and Meta have defended their heavy AI investments, emphasizing the need to stay competitive. Investors will be closely watching how major tech companies adjust their AI spending in the coming weeks.
Blackstone shares were down nearly 4% in afternoon trading.
with inputs from Reuters
