Blackstone

I have been sleeping on this, and every fund manager has. Blackstone (BX) a hidden AI leader? Blackstone has a data center portfolio worth $70 billion and an additional $100 billion in its pipeline. This includes significant investments like the acquisition of AirTrunk for $16 billion. Their Strategy Sprints score just flipped 10/10.

INVESTMENTS IN AI INFRASTRUCTURE

Blackstone invested $300 million in DDN, a California-based AI and data intelligence solutions leader, at a valuation of $5 billion. DDN's solutions are critical for high-performance computing and AI workloads, supporting over 500,000 NVIDIA GPUs globally. This investment aims to fuel DDN's rapid growth in serving AI and high-performance computing needs. Blackstone has also been expanding its investments in data centers and digital infrastructure, which are essential for AI development. This includes partnerships with companies like CoreWeave, highlighting Blackstone's focus on AI-enabling technologies.

FOCUS ON AI ENABLEMENT

AI as a Long-Term Theme: Blackstone views AI as a transformative force and has been building capabilities to capture AI opportunities since 2015. The firm's data science team has developed AI technologies to position Blackstone at the forefront of its industry.

Investment in AI Companies: Blackstone has invested in companies like Vectra, which uses AI to stop cyberattacks, demonstrating its commitment to AI-driven businesses.

Leadership in AI Research: Blackstone's Chairman, Steve Schwarzman, has supported AI research through founding donations to centers at Oxford and MIT, underscoring the firm's early recognition of AI's potential.

Blackstone's investment in AI aligns closely with its overall business strategy, focusing on long-term value creation and leveraging its scale to capitalize on transformative technologies. Here's how Blackstone's AI strategy fits into its broader business approach:

Leveraging Data and Scale

Blackstone, as the world's largest alternative asset manager, has access to an enormous amount of private market data across its portfolio. This data abundance is a crucial asset for AI development and implementation, allowing Blackstone to:

1. Spot trends early and invest with conviction.

2. Train AI models more effectively than smaller players.

3. Gain insights across various industries and markets

Long-term Investment Theme

Blackstone views AI-enablement as a long-term investment theme, recognizing its potential to transform industries and create value1. This aligns with the firm's strategy of identifying and investing in major economic trends.

Enhancing Investment Decision-Making

Blackstone uses AI to:

• Assess risks in potential acquisitions.

• Forecast demand for its e-commerce warehouses.

• Support investment teams in deal evaluation.

These applications enhance Blackstone's core business of making informed investment decisions across various asset classes.

Portfolio Company Enhancement

Blackstone is actively integrating AI into its portfolio companies to drive value creation:

• Offering AI strategy and integration support to portfolio companies.

• Encouraging CEOs to embrace AI to maintain competitive advantage.

• Providing access to Blackstone's Data Science Community and network of experts.

This approach has reportedly delivered an estimated $200 million in bottom-line impact for portfolio companies.

Strategic Investments in AI Infrastructure

Blackstone is investing in the infrastructure that enables AI development:

• $300 million investment in DDN, an AI and data intelligence solutions provider23

• Lead role in $2.3 billion debt financing for CoreWeave, a startup building AI-ready data centers.

These investments position Blackstone to benefit from the growing demand for AI infrastructure and services.

Talent Attraction and Innovation

By focusing on AI, Blackstone aims to:

• Attract top talent in data science and AI4

• Foster innovation within the firm and its portfolio companies

• Stay at the forefront of technological advancements in the financial industry

In conclusion, Blackstone's AI strategy is deeply integrated into its overall business approach, leveraging its scale and data resources to enhance investment decisions, create value in portfolio companies, and position itself as a leader in the AI-driven future of asset management.

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