Blackstone CEO: AI Systems Don’t Need Huge Amounts of Power and Investment
DeepSeek’s Innovative Approach
The Chinese AI start-up DeepSeek has recently upended the prevailing view that artificial intelligence systems require huge amounts of power and investment. However, Blackstone, the private equity behemoth, remains optimistic.
Blackstone’s President’s Views
"We still think there’s a vital need for physical infrastructure, data centers and power," Jonathan Gray, Blackstone’s president, said during a fourth-quarter earnings call with investors on Thursday. "The form of that use may change."
Adapting to the Changing Landscape
Mr. Gray noted that like much of the investing and corporate world, executives at Blackstone have spent a lot of time in the past week weighing the impact of DeepSeek. The company has made an aggressive push into buying and building data centers, the physical infrastructure used by technology companies to run AI systems. In 2021, it purchased the US data center firm QTS for $10 billion, and last year, it led a roughly $16 billion deal to buy AirTrunk, which operates data centers in Asia.
The Future of AI Adoption
Mr. Gray’s comments echoed the relatively sanguine views of some technology executives in recent days, including those of Microsoft’s chief executive, Satya Nadella. Mr. Gray said he expected that as the cost of computing power for AI drastically decreased, AI would be more widely adopted. In other words, he said, while the amount of power needed for an AI model to answer a specific question may decrease, people will ask more questions.
Blackstone’s Data Center Strategy
Mr. Gray said Blackstone builds data centers only for technology companies that sign long-term leases. "We don’t build them speculatively." The way customers use these data centers, he noted, could very well change.
Blackstone’s Performance
Blackstone’s stock has been on a run lately. It’s traded up roughly 40 percent in the past year, outpacing major stock indexes. It was down roughly 3 percent in midday trading.
A Shift in Focus
Thursday’s investor call was a shift from previous ones. In recent calls, the firm’s senior executives had taken a few minutes at the outset to discuss AI’s importance to the world and Blackstone’s investments around the technology.
Conclusion
Blackstone’s CEO, Stephen A. Schwarzman, has previously described the consequences of AI as "as profound as what occurred in 1880, when Thomas Edison patented the electric lightbulb." He cited expectations that the United States would need approximately $1 trillion of capital expenditures over the next five years for new data centers and another $1 trillion outside the United States.
FAQs
Q: What is DeepSeek’s innovative approach to AI systems?
A: DeepSeek has upended the prevailing view that AI systems require huge amounts of power and investment.
Q: How does Blackstone view the need for physical infrastructure and data centers?
A: Blackstone’s president, Jonathan Gray, believes that there is a vital need for physical infrastructure, data centers, and power, but the form of that use may change.
Q: How does Blackstone’s data center strategy differ from its previous approach?
A: Blackstone builds data centers only for technology companies that sign long-term leases, and the way customers use these data centers could very well change.
