Navigating Geopolitical Near-Term Challenges: Gray explicitly acknowledges localized near-term challenges, particularly the ongoing war in the Middle East involving Iran [00:00:41, 00:01:17]. This conflict has put upward pressure on global energy and oil prices, consequently causing the 10-year and 30-year U.S. Treasury yields, along with other global benchmark rates, to spike [, ].
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Historical Pattern of Crisis Resolution: Taking a cyclical perspective, Gray notes that nearly every calendar year since 2020 has commenced with a major macroeconomic or systemic shock [00:00:55]: COVID-19 in 2020 [00:01:02], the Russian invasion of Ukraine in 2022 [00:01:09], the collapse of Silicon Valley Bank in 2023 [00:01:09], followed by "liberation day," and currently the Iran war [00:01:17]. He points out that in each instance, markets integrated the facts, accepted the realities, resolved the issues, and ultimately traded higher—a dynamic he projects will repeat [00:01:25, 00:01:31].
Economic Fundamentals & Ground Realities: Based on Blackstone’s proprietary vantage point (covering 270+ portfolio companies and 13,000 real estate assets), the broader U.S. and global economies remain fundamentally healthy [00:00:06, 00:01:43]. Blackstone’s private equity portfolio registered double-digit revenue growth in Q1 2026 [00:01:51]. Growth metrics are weaker across European markets, but the macro landscape remains generally supportive [00:01:51].
Inflationary Vectors and Central Bank Transition: Despite sticky energy costs and the lingering impacts of trade tariffs [00:01:57], real-time underlying data reveals that shelter and rental housing costs are tracking well below lagging official government metrics [00:02:06]—running at roughly a third of the government's 3% lag data print [00:02:14]. Simultaneously, labor market wage growth has moderated from 5% two years ago down to 3% today [00:02:14]. Gray emphasizes that these favorable underlying economic facts are what Kevin Warsh will inherit as the newly appointed head of the central bank (Federal Reserve) in the U.S. [00:02:29].
The Massive AI & Technological Infrastructure Super-Cycle
Unprecedented Capital Expenditures (CapEx): Five mega-cap technology hyperscalers are on track to spend an aggregate $800 billion on AI development and infrastructure [00:02:40, 00:02:49]. Gray notes that Daniel Gross is at the venue and is heavily responsible for managing these massive infrastructure cap-ex budgets and deployments at Meta [00:02:49].
Blackstone's Digital Infrastructure Footprint: Through its data center physical leasing operations, Blackstone expects to sign lease agreements for 6 gigawatts (GW) of capacity this year alone [00:03:05]. This 6 GW power footprint translates into $100 billion of physical data center buildouts, requiring an additional $200 billion worth of specialized chips that hyperscalers will install within them [00:03:05, 00:03:13]. This total $300 billion deployment matches the size of the entire economy of Finland [00:03:13]. This boom is predominantly centered in the U.S. but is spreading globally [00:03:26].
Long-Term Productivity Wave: Gray compares this structural technological shift to the 1990s commercial internet boom [00:03:32]. The impending productivity boom will start with engineering and coding efficiencies and then diffuse into the broader macroeconomy, structurally boosting corporate profit margins and earnings power [00:03:44, 00:03:52].
Core Areas of Tactical Disruption: Enterprise Software Multiple Compression
The Step-Function Structural Shift: Gray separates AI-driven changes from typical, temporary macroeconomic business cycles, labeling it a permanent "step-function change" in global business conditions [00:18:20, 00:18:39].
The Death of Traditional Business Models: Highlighting structural corporate mortality, Gray draws a historical parallel to the rise of e-commerce [00:14:43]. While legacy retail models like Sears Roebuck, Kmart, and Toys "R" Us went the way of the dodo bird [00:14:57], adaptive players captured the value proposition: Costco stock rose 20-fold, Walmart rose 7-fold, and TJ Maxx rose roughly 40-fold [00:15:13]. In software, deeply embedded systems of record with proactive management teams will survive by migrating from legacy "on-premise to cloud" frameworks over to "cloud to agentic" AI models [00:15:37, 00:15:51]. Conversely, software companies relying exclusively on rigid "per-seat pricing" will fail as human positions are replaced by digital agents [00:18:39]. This disruption extends to other traditional business structures, such as the viability of the billable hour at law firms [00:18:52], automotive repair, and insurance business models facing autonomous vehicles [00:14:36, 00:14:44].
Valuation Multiple Adjustments & Markdowns: Given the systemic uncertainty surrounding white-collar disruption, software enterprise multiples are experiencing structural re-ratings lower [00:16:09, 00:16:25]. The peak 20x revenue/earnings valuation multiples that were common 12 months ago will not persist [00:16:32]. Reflecting this on the ground, Blackstone enacted significant asset markdowns in Q1 2026 across its private equity and growth equity software portfolios [00:17:05]. Gray contextualizes the risk by noting that software accounts for a well-diversified 6.5% of Blackstone's overall global asset footprint [00:17:12].
The Equity vs. Credit Dynamics: Gray observes that while public market commentary has focused on private credit vulnerability within software transactions, private credit instruments occupy the senior, protected 35% of the corporate capital stack [00:17:26]. While scattered debt tranches may experience impairment, the core risk of multiple compression, slowed top-line growth, and management churn will be borne primarily by the junior equity tranches [00:17:34, 00:17:42].
Blackstone's High-Conviction Investment Vectors
Power, Utilities & Energy Transition: Because data centers, emerging robotic solutions, autonomous transportation, and domestic re-industrialization must ultimately "plug into the wall," Blackstone is deploying capital into infrastructure layers [00:05:31, 00:05:41]. Top long-term asset choices include energy pipelines, regulated utilities, renewable energy assets, heavy electrical equipment manufacturing, and utility service platforms [00:05:54].
Data Centers & Neo-Clouds: Gray notes that critics frequently point out overbuilding risks due to massive incoming capital [00:06:08]. He argues the exact opposite: local political pushback, acute shortages of electrical power grids, and manufacturing bottlenecks for turbines, memory chips, and space mean that completed, operational data assets are incredibly supply-constrained and highly valuable [00:06:22, 00:06:39].
Geographic Capital Deployment Focus: Blackstone is prioritizing capital allocations toward jurisdictions that actively encourage capitalism, promote risk-taking, and maintain stable taxation policies [00:08:11]. This tactical list includes the United States, the Middle East (specifically the GCC countries and Israel, which Gray expects to rebound from current geopolitical shocks) [00:08:22, 00:08:27], India (managed under Amit) [00:08:41], and Japan, which has structurally transformed into an attractive destination for private equity allocations [00:08:50].
Sectors with Structural Tailwinds:
Defense Infrastructure: Highly favored as a secular growth theme in Europe, where sovereign governments are adjusting historical defense outlays from 1% or 1.5% of GDP up toward 5% of GDP [00:06:54, 00:07:01, 00:07:08].
Commercial Real Estate (Logistics): Set to experience a structural tailwind as investors look for "terra firma" tangibility amid software disruption [00:07:15, 00:07:22]. The sector is supported by a steep multi-year decline in new construction starts and a lowering of baseline debt costs [00:07:22, ]. Logistics remains Gray's favorite real estate segment [].
Analysis of New Strategic Initiatives & Corporate Vehicles
Gray breaks down four major platforms launched within the final weeks of April and May 2026 to capture emerging structural gaps:
Anthropic Service Co Joint Venture: To resolve the integration gap between frontier Large Language Models (LLMs) and institutional software workflows (like automated financial reporting and compliance), Blackstone engineered a specialized deployment joint venture alongside other investment managers [00:09:57, 00:10:05, 00:10:11]. This consulting company brings advanced models (like Claude) directly to Blackstone's 275+ portfolio operations [00:10:25]. Notably, Anthropic's CFO and key leadership team are former Blackstone private equity professionals who trained under Joe Barata and Martin Brand [00:09:42].
BXDC (Blackstone Digital Core): This vehicle recently completed its Initial Public Offering (IPO) under the leadership of Nick Pill [00:10:39]. BXDC was designed to fill a market void: providing a permanent institutional home for long-term ownership of completed data center properties leased to top-tier global hyperscalers [00:10:48, 00:10:55, 00:11:02].
Google TPU Compute Platform: Launched to create an alternative to pure NVIDIA-dominated architectures [00:11:31, 00:11:38]. Gray notes that NVIDIA's initial near-100% market control mirrors Amazon’s early cloud dominance before Microsoft Azure and Google Cloud entered [00:11:46, 00:11:55]. Recognizing that Google’s Tensor Processing Units (TPUs) are highly effective (having trained Gemini and Anthropic models) [00:12:00, 00:12:15], Blackstone structured a vehicle from scratch to absorb the capital burden, converting large hardware outlays into a manageable "Compute-as-a-Service" model for corporate users [, ].
BXN1 Integration: Led by veteran tech investor Jazz Khaira, this platform consolidates Blackstone's high-growth, structured equity, and growth capital strategies under a single roof focused on San Francisco and Northern California [00:12:53, 00:13:34, 00:13:41]. This organizational restructuring mirrors Blackstone’s corporate move years prior, which consolidated distinct corporate, asset-backed, and insurance credit lines into the unified BXCI (Blackstone Credit & Insurance) under Gilles Collonges (referred to as GL), driving massive firm scaling [00:13:05, 00:13:12, 00:13:20].
Debunking Private Credit Critiques: Gray directly attributes negative public narratives regarding private credit to legacy leaders of large commercial banks and traditional long-only fixed-income asset managers whose business models are being disrupted [00:19:14, 00:19:26, 00:19:33]. He frames private credit as an efficient "direct-to-customer" Amazon model [00:19:47, 00:20:22]. By matching institutional capital directly with borrowers, Blackstone removes significant systemic frictions: banking origination costs, syndication fees, and internal CLO warehousing overhead, delivering higher net yields directly to LPs [00:19:47, 00:19:54, 00:20:03]. Borrowers gain pricing certainty without execution flex because Blackstone operates in the "storage business rather than the moving business" [00:20:10, 00:20:16].
Systemic Risk Mitigation: Traditional syndication channels feature a 13-times levered commercial bank selling down into an 11-times levered CLO architecture [00:20:37, 00:20:46]. In contrast, Blackstone's direct private credit deployments utilize institutional capital on a strictly unleveraged basis, or with conservative leverage capped at 1-time or below [00:20:54]. This insulation prevents systemic risk or compounding banking panic, even as base interest rates decline and loss rates normalize upward from multi-year historical lows [00:21:01, 00:21:11, 00:21:17].
Exits & Liquidity: 2026 "Year of the IPO": Gray stands by his designation of 2026 as a major exit window for private markets [00:22:49, 00:22:56]. Global market capitalization is supported by structural liquidity events, noting that two of the world's three largest private companies—SpaceX, Anthropic, and OpenAI—are expected to go public this year [00:23:02, 00:23:07, 00:23:16]. While software exits face friction, "AI-unaffected" stable businesses (such as fast-food brands, medical distributors, and suppliers like Medline and Legions) continue to clear public markets with strong performance [00:23:24, , , ].
Private Wealth Channel Scalability: Blackstone manages over $300 billion within the private wealth vertical, built up over a 25-year history [00:24:19, 00:24:40, 00:24:53]. However, Gray reassures the institutional base that committed institutional funds are the core foundation of Blackstone because their capital calls are non-cyclical, allowing the firm to deploy capital during deep liquidity drawdowns [00:25:25, 00:25:32]. This massive total pool also gives Blackstone a competitive edge, allowing it to complete massive acquisitions (like Jersey Mike's or Hologic) without relying on outside syndications [00:26:06, ].
Speaker & Institutional Leadership
Jon Gray: President and Chief Operating Officer (COO), Blackstone [00:00:00].
Key Internal Executives Cited:
Steve Schwarzman: Co-Founder, Chairman, and CEO of Blackstone (present in the front row during the discussion) [00:24:46, 00:27:58].
Vic / Vic: Senior executive highlighted for managing Blackstone's asset flywheel and executing the public exits of Medline and Legions [00:00:33, 00:23:24].
Joe Barata & Martin Brand: Core Private Equity leaders who trained the current financial professionals running tech operations [00:09:42].
Nick Pill: Executive director heading the recently listed BXDC investment vehicle [00:10:39].
Gilles Collonges (GL): Architectural designer of the consolidated BXCI business vertical [00:13:12, 00:13:20].
Jazz Khaira (Jazz Cara): Senior platform manager heading the newly integrated tech growth segment BXN1 out of San Francisco [00:09:50, 00:13:34].
Vernon Perry: Senior manager expanding Blackstone's global Secondaries pipeline [00:07:48].
Amit: Senior geographic lead supervising deployment across the Indian subcontinent [00:08:41].
External Figures Cited:
Kevin Warsh: Public official explicitly named as the incoming leader of the central bank/Federal Reserve [00:02:29].
Daniel Gross: Tech executive directing large-scale infrastructure investments and capital outlays at Meta [00:02:49].
Jul 25, 2026
Lisa Su explains what's coming next in AI | 25 Jul 2026 | Yahoo Finance
1. Executive Briefing TL;DR $2 Trillion AI Market by 2030: Total industry AI market opportunity is projected to reach $2 trillion by 2030, driven by structural shifts in global compute needs 00:00:25 http://www.youtube.com/watch?v=9tq0S6j4…
Secondaries: Anticipating an expansive pipeline of institutional secondary sellers seeking liquidity, which directly benefits Vernon Perry's business division [00:07:48].
Private Credit Scaling: Beyond legacy corporate credit markets, Gray expects explosive growth in large-scale private investment-grade allocations. These solutions provide the flexible capital structures needed to fund massive global AI infrastructure developments away from public fixed-income markets [00:22:00, 00:22:07, 00:22:13].