Blackstone Bets Big on AI Data Centers for Everyday Investors

Blackstone Inc. is introducing a new publicly traded acquisition company designed to purchase data centers, thereby enabling retail investors to participate in the artificial intelligence boom. The investment giant is initially seeking substantial capital from sovereign wealth funds and other institutions, with plans to eventually raise tens of billions from a wider investor base.

This initiative aligns with Blackstone's strategy to be a leading investor in AI infrastructure and expand its reach to everyday investors beyond traditional pensions and endowments. The vehicle will concentrate on acquiring operational, leased data centers, steering clear of more speculative land or development projects.

This move places Blackstone at the forefront of the data center construction surge, while also sparking discussion about the sector's long-term viability and the implications of exposing individual investors to this high-growth area. Concerns exist that technological advancements could render current AI training facilities obsolete.

The new entity is expected to debut as soon as this year, entering into competition with established data center REITs like Digital Realty Trust Inc. and Equinix Inc. for capital. Blackstone's CEO, Steve Schwarzman, has highlighted the "historic pace of investment" in AI development as a key economic driver and a significant demand for capital solutions.

Some potential investors have inquired whether Blackstone might utilize this new vehicle to acquire data centers from its existing funds, potentially facilitating exits for some investors. However, sources indicate that Blackstone executives do not intend for the new company to purchase assets from its portfolio companies. Blackstone aims for this new company to serve as a benchmark for data center valuations, streamlining industry dealmaking.