October 13th 2026, 9:50 PM
Blackstone's AI Data Center Empire Faces Public Investor Scrutiny
Key Summary
Blackstone, a major investor in the AI data center boom, is facing increasing skepticism from public investors as companies struggle to turn a profit. Despite valuations of over $10 billion, Blackstone's own equity investments are under scrutiny, and the firm's shift from lending to owning may be a costly mistake.
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The Shift from Lender to Owner
Blackstone spent years lending money to the AI data center boom at double-digit yields. Then it decided owning a piece of the action looked even better.The Market's Changing Attitude
From lender to owner, Blackstone's exposure is not small. The firm owns 6.7% of Firmus, an AI infrastructure company. That stake came after Blackstone joined a $2 billion funding round in August 2026 that valued Firmus at more than $10.5 billion.The Cash Flow Problem
CoreWeave has become the cautionary example. The company has struggled to reach positive free cash flow, even as its EBITDA forecasts look robust.The Headwinds
The sector is dealing with power constraints, local opposition to new facilities and regulatory scrutiny.The Pipeline
Blackstone has not been sitting still. In June 2026, Digital Realty agreed to buy Blackstone's blended 64% equity interest in three fully leased Northern Virginia data centers, with a combined 288 MW of capacity.The Takeaways
For Blackstone, the timing is awkward. The firm swapped the steady income of double-digit debt yields for equity upside right as public markets grew more skeptical of that upside. Private valuations, like Firmus at above $10.5 billion, eventually need public buyers willing to agree.#AI#DataCenter#PublicInvestors#Blackstone