Data center investments were the single largest driver of growth in the real estate and infrastructure businesses for Blackstone (NYSE: BX), as well as for the firm overall in the second quarter, the company announced in its 2Q24 earnings call.
The build out of data centers is the result of the boom in artificial intelligence, which the company’s Chairman and CEO Steve Schwarzman compared with the invention of the electric light bulb. Blackstone is positioning itself to be the largest financial investor in AI infrastructure in the world, he said.
“We own the fastest growing data center platform in the world,” Schwarzman said. “We believe these explosive trends will lead to unprecedented investment opportunities for our firm.”
In the next five years, approximately $1 trillion is expected to be spent to build new data centers in the U.S., according to Schwarzman, with another $1 trillion outside the U.S. As a result, data centers are expected to help push a 40 percent increase in electricity demand in the U.S.
Blackstone’s portfolio currently consists of $55 billion in data centers including facilities under construction, along with over $70 billion in prospective pipeline development. Its largest data center portfolio company QTS has grown leased capacity seven times since it went private in 2021.
“Through QTS and our other holdings, we have a robust ongoing dialogue with the world’s largest data center customers, Schwarzman said. “We’re also providing equity and debt capital to other AI-related companies.” For example, in the second quarter, $4.5 billion was committed by Blackstone to the AI-focused cloud service provider Coreweave, which is the company’s largest ever debt financing.
Blackstone is now focusing on power needs of data centers with platforms in infrastructure, real estate, private credit and renewable energy, according to Schwarzman. “We are extremely well positioned to be the partner of choice in this rapidly growing area,” he said.
By J. Sharpe Smith, Inside Towers Technology Editor
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