Blackstone's President refutes AI bubble theory: demand is growing "parabolically", fundamentally different from the 1990s telecom bubble.

Amid growing AI bubble concerns on Wall Street, Blackstone President Jon Gray offered a contrasting view. He noted that current AI infrastructure development differs fundamentally from the 1990s telecom bubble, when companies typically expanded capacity en masse before waiting for demand to materialize, whereas today firms are building infrastructure to keep pace with already surging real demand. Gray described current AI demand as "parabolic growth" and revealed that Ode, an AI advisory venture co-founded by Blackstone and Anthropic, is currently even unable to meet client demand. This stands in stark contrast to the bearish view of Citadel founder Ken Griffin, who said days ago that "we are almost certainly in an AI bubble." Blackstone is positioning AI as a core investment focus, with its data center investments already totaling around $200 billion, and is deploying capital broadly into power, transmission facilities and other supporting infrastructure. However, Gray also acknowledged that even with real demand, not every investment will deliver ideal returns. Some AI-focused cloud service providers, such as CoreWeave, are currently facing financing difficulties despite solid core business performance. Gray pointed out that data center construction requires massive upfront investment, and investors must weigh whether future cash flows can cover financing costs, as well as the risk of asset depreciation from technological iteration. The current bubble debate essentially boils down to testing whether AI’s explosive demand can ultimately translate into sustainable commercial returns that cover high costs.