Blackstone’s Jon Gray says AI infrastructure needs more equity financing

The Blackstone president warns that lenders are piling up concentration risk as the AI buildout's capital demands keep climbing The AI boom has a financing problem, and one of Wall Street’s biggest dealmakers is saying it out loud. Blackstone President Jon Gray said Tuesday that the artificial intelligence infrastructure buildout will need more equity financing, because lenders are becoming too exposed to the companies doing the building. When the firm that just helped arrange part of a $63 billion AI financing package says debt alone can’t carry the load, the market tends to listen. Gray’s case against an all-debt AI buildout Gray made the remarks at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit. His core argument centered on concentration risk, which shows up in two places: across the AI sector as a whole, and inside individual companies. Gray also pointed to a basic asymmetry between owning a company and lending to it. Shareholders can ride a company’s growth higher. Lenders, by contrast, mostly collect interest and get their principal back. That lopsided trade gets less appealing as the loans get bigger and the borrowers get more concentrated. T...