Blackstone's Gray: AI Buildout Needs More Equity as Lenders Load Up on Debt

Blackstone president and COO Jon Gray took the stage at the Hong Kong Monetary Authority's Global Financial Leaders' Investment Summit on Tuesday with a blunt message: the AI buildout is leaning too hard on debt. Lenders are getting crowded into the same handful of companies, he warned, and that concentration cuts across both the sector and individual firms. The fix, in his view, is more equity. Lots of it.

Gray laid out the asymmetry plainly. Shareholders ride a company's growth, but lenders only get interest and principal back. With AI's capital demands ballooning, that limited upside looks worse by the day. "There's going to be more equity needed across this space to keep up with these enormous demands," he said.

Pimco CEO Emmanuel Roman, on the same panel, poured fuel on the worry. He said AI-related capital spending could hit about $10 trillion over the next five years, citing an estimate from General Atlantic CEO Bill Ford. Roughly $550 billion in AI debt has already been issued in various forms this year, he added. Against a global corporate bond market of about $20 trillion, even a mix of equity and debt would be a "gigantic" ask. "At some point in time, it's going to be too much," Roman said.

The bill keeps getting bigger. Goldman Sachs wrote in a report Monday that global data center demand will need about $8.5 trillion in capital spending over the next five years.

Gray isn't waiting for a single funding source to save the day. He said the buildout will pull from public markets, banks and private capital together, with companies leaning on structured transactions to keep debt off their books. Hyperscaler cash will cover part of the tab too. "The creativity is needed because the scale of capital is enormous," he said.

For all his financing caution, Gray stayed bullish on the assets themselves. Demand for computing power is "running well ahead of supply," he said, and AI spending across Blackstone's portfolio companies has jumped 20-fold in a year as businesses banked gains from coding, customer engagement and content creation. The hard part is delivery — locking down sites, permits, chips, power and capital keeps getting tougher.