Gray’s comments reinforce a theme running through this week’s news flow: the AI buildout is increasingly being financed by issuing shares, not just from cash flow and debt. For equity markets, more issuance from major tech companies means a heavier supply of new stock and potential dilution for existing holders. That can weigh on prices around deals, as Oracle’s discounted $10 billion sale shows. Coming from the head of one of the largest investors in data centers, the remarks also signal confidence that AI demand is durable enough to justify the capital. That is supportive for infrastructure, power and chip suppliers, even if the funding burden falls on the spenders. The key question for investors is whether new equity is priced at a premium or a discount, which will show how willing markets are to keep financing the buildout.
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The AI spending race is outgrowing what cash flow and borrowing can cover, and Blackstone’s Jon Gray expects the biggest tech companies to come back to equity investors for more.
Summary:
- Blackstone President Jon Gray said more global equity fundraising will be needed to keep pace with the enormous demand from AI industry growth. Info via Reuters.
- He said most major technology companies are expected to raise more capital
- Gray spoke at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit on Tuesday
- Blackstone is the world’s largest alternative asset manager, with nearly $1.4 trillion in assets under management, and has been investing heavily in AI-related infrastructure
- His comments come as Oracle prepares a $10 billion share sale and other large tech firms turn to equity markets to fund AI spending
Blackstone President Jon Gray said on Tuesday that more global equity fundraising will be needed to keep up with the enormous demand created by the growth of the artificial intelligence industry. He added that most major technology companies are expected to raise more capital.
Gray made the remarks at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit, Reuters reported. His comments point to an AI buildout whose funding needs are outgrowing what the largest companies can cover from operating cash flow and borrowing alone.
Blackstone is the world’s largest alternative asset manager, meaning it invests in assets beyond publicly traded stocks and bonds. It oversees nearly $1.4 trillion across real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds. Its investors include pension funds, insurance companies and individuals. The firm, led by Chairman and Chief Executive Stephen Schwarzman, has positioned itself as a major investor in the physical infrastructure behind AI, including data centers and energy. Its recent activity includes a joint venture to develop a data center campus in Michigan. Gray, as president, is the firm’s second-ranking executive.
That gives Gray’s view particular weight, since Blackstone sits on the supply side of the buildout and sees demand for capacity firsthand.
His comments match a pattern seen this week. Oracle is preparing to price a $10 billion share sale, alongside a matching bond offering, to fund its AI expansion, and is reportedly offering a discount of around 11% to attract buyers. Pershing Square noted in its latest shareholder letter that Meta had announced a $98 billion equity raise. Anthropic is also preparing for a public listing.
The shift toward equity funding cuts both ways for investors. It allows companies to keep investing without overloading their balance sheets, but it dilutes existing shareholders and adds a steady supply of new stock to the market. How readily investors absorb that supply, and at what price, is becoming a key measure of confidence in the AI spending cycle.
This article was written by Eamonn Sheridan at investinglive.com.