Blackstone Inc. President Jon Gray pushes back against the idea that there is an AI bubble. He says demand for AI is "almost parabolic." He speaks to Dani Burger on "Bloomberg Open Interest" about investing in AI and the firm's third-quarter earnings results.
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What Jonathan Gray said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Jonathan Gray discussed Blackstone's challenging quarter, noting energy prices up 30% and interest rates up 80 basis points slowed transactions, but emphasized strong client delivery, $63 billion in inflows, and over $270 billion raised in the last 12 months, the most in four years. He argued AI demand is parabolic, contrasting with past bubbles like telecom, citing 20-fold year-on-year growth in model spend and demand outpacing supply. Gray addressed the neo cloud market, saying compute prices are up 50% from a year ago and H100 leases near original rates, while acknowledging cost of capital challenges for companies like CoreWeave. He advocated for an Anthropic IPO to lower costs, noted US IPO volume up 3.5-fold this year, and projected the window could rival 2021 if Anthropic completes.
Key takeaways
AI demand is parabolic, unlike telecom bubble, with model spend up 20-fold year-on-year.
Compute prices are up 50% from a year ago, and H100 leases near original rates.
Anthropic IPO would lower capital costs for big labs, similar to SpaceX's effect.
US IPO volume is up 3.5-fold year to date, with potential to rival 2021 if Anthropic lists.
Blackstone raised $63 billion in inflows, over $270 billion in the last 12 months.
0:56So what needs to change in order to realize the strength to come?
2:21John, are you seeing bubbles, and if so, is there a risk that something's going to burst?
4:35As the overall rate environment also moves higher, is cost of capital an issue also for the AI buildout?
6:07Is there this real risk that what at the moment is kind of a technical issue, a structural one, with yields moving higher, becomes a fundamental one?
It was a challenging quarter. You had energy prices up 30%, you had interest rates up 80 basis points, and that obviously slowed transaction activity a bit. The key for us is that we delivered for our clients across the board. Our flagship strategies beat comparable public market indices, and that's what we're really focused on. And then in terms of inflows, we did manage to raise $63 billion of inflows, more than $270 billion over the last 12 months. That's the most in four years. And on the financials, there was a bit of lumpiness on the realization side, but the fee-related earnings were up 6% in the quarter. The overall earnings are up 12% year to date. And when we look out towards Q4 and 2027, we feel strong.
Looking to the future, the strength that you're pointing out — what has to change for that to go right, John? Because some of the volatility, be it from energy, there's no sight to the end of the war in Iran at this moment, be it rates, the Fed isn't entertaining discussions of cutting rates at this moment. So what needs to change in order to realize the strength to come?
Well, we're assuming that we're going to be in a choppy world for a while. So I'm not just planning for the world to get much better, but you could, to the upside, see better things happen. Obviously, if you had a resolution of either or both of the conflicts in Russia-Ukraine or the Middle East, that would be very helpful out there. I think it would ease pressure on the Fed and other central banks and take inflationary pressures down.
We just need a bit of terra firma. I think the thing people are forgetting about is the underlying economic strength, particularly in the United States. Globally, our companies in private equity had 10% revenue growth, margins continue to expand, and when you get that, you get that kind of very strong earnings growth. At some point here, you get a little terra firma out there in terms of the environment, you'll see a better capital markets world, and I think we'll get there at some point. But for now, we're assuming we're in a volatile world for the foreseeable future.
Shall we talk about the other market anxiety that's going on right now? John, I spoke to Ken Griffin about it earlier this week. We see signs of bubbles. Ray Dalio has been on bubble watch. You perhaps better than anyone know this world, because you're both financing it and using the AI technology itself. John, are you seeing bubbles, and if so, is there a risk that something's going to burst?
So we see it a little bit differently. I would say when you think about a bubble, you think about building capacity and then hoping the demand comes. With AI, you're building capacity and you're hoping you can keep up with the demand. That's a very different dynamic.
If I take that back to the 90s and telecom infrastructure — classic bubble, right? They built tons of fiber hoping the demand would come. They used a lot of leverage. It ended poorly. Contrast that with what we're seeing today at our portfolio companies: demand for models, spend on models is up 20-fold year on year. We created a company with Anthropic called Ode, and this company is designed to deploy the AI, and we can't keep up with customer demand. Obviously, these personalized agents are rolling out as well, creating incremental demand.
So demand is almost parabolic. And on the supply side, that's the part of the world where we're really focused. It's governed by a lot of things that are slowing down delivery — so getting entitlements, getting power, getting chips, amassing the capital. That's meaning that supply is struggling to keep up with this demand. And we as a firm are really focused on that infrastructure and building long-term assets, being energy assets or data centers that are contracted to the biggest companies. So we see it differently today. There's really an indisputable shortage of compute, and it's hard to deliver that compute, and that's what's preventing some of the excesses we've seen in past, what they call bubbles on the supply of capital.
You mentioned that is one of the constraints, John. It is a market that feels like it's testing it in real time. CoreWeave, a company that you work with, that you've done ship financing with in the past, is seeing its yields on some of its debt go to 15%. As the overall rate environment also moves higher, is cost of capital an issue also for the AI buildout?
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Gray, J. (2026, October 22). Blackstone's Gray Says AI Demand Is 'Parabolic' [Interview transcript]. Bloomberg Television. CEOInterviews.AI. https://ceointerviews.ai/interview/3112531/
MLA
Jonathan Gray. "Blackstone's Gray Says AI Demand Is 'Parabolic'." Bloomberg Television, 22 Oct. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3112531/.
BibTeX
@misc{gray2026_3112531,
author = {Jonathan Gray},
title = {Blackstone's Gray Says AI Demand Is 'Parabolic'},
howpublished = {Interview transcript, Bloomberg Television. CEOInterviews.AI},
year = {2026},
month = {oct},
url = {https://ceointerviews.ai/interview/3112531/},
note = {Speaker-attributed transcript with timestamps}
}
