Blackstone's Jas Khaira Says AI Buildout Debt Fears Are Overblown

Blackstone's AI Strategy and Compute Ownership

Blackstone veteran Jas Khaira spoke at TechCrunch Disrupt last week about the firm's central role in the AI boom. With $1.3 trillion in assets under management, Blackstone launched the BXN1 hub in San Francisco to coordinate its AI initiatives. Khaira said the firm is now the largest owner of compute capacity outside the hyperscalers through investments in neo clouds and data centers.

BXN1 has participated in several major compute deals. It committed $5 billion to Crux AI, a neo cloud launched with Google to commercialize custom TPUs. The group also backed Etched, a chip startup that has attracted strong investor interest.

Financing Model and Market Concerns

Blackstone pioneered a financing structure that lends large sums to venture-backed neo clouds using committed customer contracts and GPUs pledged as collateral. The first such deal in 2023 provided CoreWeave with a $2.3 billion loan despite only $30 million in revenue at the time. CoreWeave's debt has since grown to about $50 billion. Blackstone also co-led a $10 billion credit facility for Australian GPU provider Firmus earlier this year.

Recent market jitters have been driven by higher interest rates and wider credit spreads. CoreWeave shares fell more than 20 percent and Firmus cancelled its planned IPO targeting a $30 billion valuation. Khaira said the debt is ultimately backed by investment-grade customers such as Microsoft and Meta, which limits systemic risk.

AI Adoption Efforts and Outlook

Beyond infrastructure financing, Blackstone formed a $1.5 billion joint venture called Ode with Anthropic and Hellman & Friedman. Ode supplies forward-deployed engineers to help Blackstone's 280 portfolio companies adopt AI. Khaira acknowledged that returns on AI adoption are uneven and may follow a sawtooth pattern as compute supply and demand adjust.

He downplayed fears of a broad credit crisis, saying the situation does not resemble the shaky credits of 2008 banks, and emphasized that most data center debt is supported by the world's most creditworthy companies.

Sources: TechCrunch