Blackstone's Jas Khaira Says Fears Over AI-Buildout Debt Are Overblown
Investment giant Blackstone does not believe the debt piling up around data centers and AI infrastructure threatens the wider economy, according to executive Jas Khaira. He spoke at the TechCrunch Disrupt conference.
Jas Khaira, a senior executive at private equity firm Blackstone, which manages $1.3 trillion in assets, played down fears last week that debt taken on to build AI infrastructure could spark a broad credit crisis. He was speaking at the TechCrunch Disrupt technology conference. The question has become pressing because doubts about the debt loads of some data center companies have grown in recent weeks.
Blackstone's role in the AI boom
Earlier this year the firm launched Blackstone N1 (BXN1), a San Francisco hub for its AI initiatives. It is led by Khaira, who moved from New York for the job. Blackstone makes large loans to data centers and also invests in leading AI models and applications. Khaira says it is the largest owner of compute outside the hyperscalers, the biggest cloud providers.
Blackstone developed a financing model for lending to "neoclouds", companies that rent out AI graphics processors (GPUs). It assesses both signed customer contracts and the GPUs pledged as collateral. The first such deal came in 2023 with CoreWeave: a $2.3 billion loan at a time when the company had only $30 million in revenue. Blackstone later co-led, with Coatue, a $10 billion credit facility for Australian GPU provider Firmus.
Why markets are nervous
Khaira acknowledged that interest rates rose in September, inflation came in hotter than expected and credit spreads have widened. CoreWeave's debt has reportedly grown to about $50 billion and its shares fell more than 20% in recent days. Firmus scrapped its planned listing on the Australian Securities Exchange, which targeted a valuation of roughly $30 billion.
Still, Khaira argued the situation differs from 2008, because most data centers are built for hyperscalers, so the debt is ultimately backed by the world's most creditworthy companies. Blackstone has also formed a $1.5 billion joint venture, Ode, with Anthropic and Hellman & Friedman to help companies adopt AI. Khaira said returns exist but are uneven.
