Blackstone CEO Jumps On ‘The Next AI Trade’ 

US power grid regulators and utilities are warning about energy shortfalls. Projections for US electricity demand growth over the next five years have doubled from about one year ago, primarily because of the expected explosion of artificial intelligence data centers, federally subsidized manufacturing plants, and the government-fueled electric vehicle transition. 

Source: NERC – 2022 Long-Term Reliability Assessment (as of December-2022). Grid Strategies – The Era of Flat Power Demand is Over (as of December-2023).

In recent months, Wall Street has received the memo about the tidal wave of new electricity demand from data centers powering technology like generative AI. We recently outlined to readers investment opportunities in powering up America for the digital age in “The Next AI Trade.”

On Tuesday, Blackstone Chief Executive Officer Steve Schwarzman appeared to have also received the memo as Wall Street whistles the same tune about the AI boom threatening to overload the nation’s power grid and the urgent need for an upgrade. 

Schwarzman told the audience at the Asia Pacific Financial and Innovation Symposium in Melbourne that a massive “land rush” is underway to build AI data centers.  

“This is like something I’ve never seen,” he said via webcast, who was quoted by Bloomberg, adding, “The amount of money being invested in this area is breathtaking. It’s happening now all over the world.”

The co-founder and chairman of the world’s largest alternative asset manager warned, “Different states in the US are starting to run out of electricity” and “the lack of capacity in the electric grids in the industrial world with AI and EVs is creating enormous investment opportunities.”

In 2021, Blackstone purchased QTS Realty Trust, a company with more than 25 data centers in its portfolio across North America and Europe, for $10 billion. 

“You’ll be able to create 20% returns building these data centers with 30-year contracts,” he said, adding, “This is pretty amazing.”

Schwarzman should also consider investment opportunities in the nuclear power plant space. Last month, we showed how a nuclear renaissance is underway in a note titled “In Historic Reversal, US To Restart A Shut Down Nuclear Power Plant For The First Time Ever.” 

In “The Next AI Trade,” we explain what equity exposure is needed to capitalize on powering up America for the digital age.