Good, potentially very lucrative things will come to the AI investors who wait, if you ask Jon Gray.
Gray, the president and chief operating officer at Blackstone, said that growing concern about the pace of the AI buildout is somewhat overblown.
"I'm not going to discount that there's not going to be misallocations of capital. There are people who are doing things that may not turn out to have high returns. But I think the impatience is a little misplaced. It takes some time for the applications to happen," Gray said on an episode of Blackstone's podcast that aired on July 30.
July was a turbulent month for AI-linked stocks. Chipmaker stocks were hit by jitters in Asian markets. Investors have become increasingly skeptical about the pace of hyperscalers' tremendous AI spending. Meta and Alphabet shares dropped after they each raised yearly AI spending predictions. Gray said that AI will eventually work its way through many business areas, and described the technology as a "new operating system for the global economy."
Blackstone, the world's largest data center investor, is investing heavily across the AI economy. Gray said that one data center creates a ripple effect of economic activity, since it demands investments in chips and power.
When Gray rattled off the firm's biggest deals from the second quarter, almost all of them touched the AI buildout, from chips to semiconductors to data centers. The company recently bought three hotels in the San Francisco area, the country's AI capital. In June, Blackstone bought the Hyatt Regency for $279 million, or about $340,000 per room, according to a press release from the seller.
Revenue for the firm's private equity portfolio grew 11% in the second quarter, a result Gray said was driven by investments in AI. The growth, he said, has "got a long way to run."