Blackstone posted higher first‑quarter profit as the world’s largest alternative asset manager leaned further into artificial‑intelligence support systems — and pushed back against rising investor concerns around private credit and AI‑driven disruption.
The firm said its financial results held up despite geopolitical volatility and a broader pullback in individual investors' risk appetite. The New York-based firm was helped in part by rising exposure to data centers, power generation and other physical assets tied to AI.
“Blackstone has become the largest investor in AI-related infrastructure in the world,” CEO Stephen Schwarzman said on a call with Wall Street analysts to discuss its earnings. “The AI revolution, [with] an extraordinary level of investment taking place in data centers, equipment, chips, energy infrastructure, and other related areas, continues to power economic growth, and we see no signs of that engine slowing down.”
As part of that investment thesis, Blackstone also has become one of the largest investors “in the modernization and growth of the U.S. electric grid,” driven by growing energy demand from users including data centers, he said. Blackstone owns the longest cross-country network of natural gas pipelines in the United States, which Schwarzman said is expected to account for about half of data center power generation within the next five years.
Blackstone was the second major real estate company to report on Thursday that it's benefiting from added demand for the data centers supporting AI. CBRE, the world's largest commercial real estate services firm, raised its annual profit outlook after reporting its biggest quarterly gain in almost four years. That was fueled partly by its data center land development business, while revenue boomed by 65% in the firm's group that works heavily in telecommunications and power.
The Blackstone comments came against a backdrop of heightened scrutiny of the private‑credit industry, where some investors and policymakers have warned that rapid growth, leverage and limited transparency could amplify stress in a downturn, including concerns around AI‑driven disruption in parts of the economy.
While Blackstone executives rejected those concerns as overblown, they acknowledged that the criticism has begun to affect capital flows from private-wealth individuals.
Major AI investor
Blackstone is a private-credit provider to energy companies and an investor in major AI firms such as Anthropic and OpenAI.
Schwarzman expects AI to “catalyze new opportunities” across other parts of Blackstone’s portfolio such as life sciences as “AI will accelerate advancements in biomedical research.”
Even so, some sectors and companies will see disruption, he said, pointing to software firms as having “come into focus as an at-risk area.” Concerns about AI reducing the number of white-collar jobs have led some individual investors to sour on private credit and pull back capital.
“It’s worthwhile to separate fact from fiction,” he added. “External assertions have ranged from the sector posing systemic risk to the prospect of significant losses of investor capital. These assertions, and their dissemination, have negatively impacted capital flows in the wealth channel to private-credit strategies, including to our flagship vehicle in the space.”
Still, despite the “external noise,” Schwarzman said institutional and insurance clients, a group that represents 75% of Blackstone’s credit platform assets under management, have continued to commit large-scale capital.
“Blackstone is extraordinarily well-positioned for an AI-enabled future,” he said.
Data centers boost returns
Blackstone Real Estate Income Trust, its flagship nontraded real estate investment trust, now has about 23% of its portfolio invested in data centers, Jon Gray, Blackstone's president and chief operating officer, said on the call. The concentration helped Blackstone generate a 0.8% positive return in the first quarter across its core‑plus real estate strategy that invests in stable properties with moderate risk.
BREIT also posted positive net inflows of investor capital in each of the past two months as Blackstone's largest private-wealth investment vehicle by net asset value delivered positive returns in each of the past 15 months, Gray said. BREIT raised $1.2 billion last quarter, up 44% from a year earlier and its strongest quarterly inflow in three years.
The core-plus results were offset by Blackstone’s riskier opportunistic real estate investment segment that posted a 0.9% decline in the quarter. Chief Financial Officer Michael Chae pointed out weakness in life science office and the impact of Blackstone’s public holdings in India following a roughly 15% decline in that country’s stock market last quarter.
Among real estate tailwinds, logistics, where Blackstone also has a big exposure, is seeing “positive momentum in leasing activity, including a record forward pipeline for our U.S. platform,” Chae said. “The collapse of new supply will be very supportive of fundamentals over time across major sectors, including logistics and multifamily, where industry forecasts call for" completions this year to be at their lowest levels in 12 years, he said.
Real estate “really has been the sleeping giant at Blackstone,” Gray said. As investors move back toward physical assets and markets steady after the war in Iran, supply‑constrained sectors such as logistics could start growing faster again, he said.
First-quarter distributable earnings, or profit available to investors, jumped 25% to about $1.8 billion. Total assets under management rose 12% to a new record of about $1.3 trillion.