Jon Gray Calls for More Equity to Fund AI Buildout as Debt Risks Mount

According to CNBC, Blackstone Inc. President Jon Gray said the AI infrastructure buildout will need more equity financing as lenders’ exposure to companies driving the expansion creates concentration risks across the sector and at individual firms. Speaking at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit on Tuesday, Gray said the buildout would draw on public markets, banks and private capital, while companies use structured transactions to limit debt and hyperscalers’ cash flow helps fund spending. PIMCO CEO Emmanuel Roman warned that the scale of financing could exceed what markets can absorb, citing an estimate from General Atlantic CEO Bill Ford that AI-related capital spending could reach around $10 trillion over the next five years. Roman also said about $550 billion in AI debt had been issued in various forms so far this year. Goldman Sachs estimated in a report Monday that global data center demand would require about $8.5 trillion in capital spending over the next five years. Gray said demand for computing power was running ahead of supply and that spending on AI models across Blackstone’s portfolio companies had risen 20-fold over the past year.