Blackstone President Urges Shift Toward Equity Financing to Mitigate AI Infrastructure Debt Risks

Jon Gray, president and chief operating officer of Blackstone Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 3, 2026. This year’s event brings together around 280 global financial leaders, including roughly 120 group chairs and CEOs, with the outlook for markets, the global economy and rapid advances in technology among the big themes. Photographer: Anthony Kwan/Bloomberg via Getty Images

The massive expansion of artificial intelligence infrastructure will require an increase in equity financing as lenders face growing exposure to the companies driving the buildout, Blackstone President Jon Gray stated on Tuesday.

Speaking at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit, Gray noted that the sheer volume of capital necessary for AI development is creating significant concentration risks for debt investors, both on a sectoral level and within individual firms.

Gray highlighted a fundamental imbalance in risk and reward: while shareholders stand to gain from a company’s exponential growth, lenders face limited upside, as their returns are restricted to interest and principal repayments.

There’s going to be more equity needed across this space to keep up with these enormous demands.

Jon Gray

President & COO, Blackstone Inc.

Joining the panel, Pimco CEO Emmanuel Roman cautioned that the magnitude of AI financing might exceed the market’s capacity to absorb it. Citing estimates from General Atlantic CEO Bill Ford, Roman suggested that AI-related capital expenditures could hit $10 trillion over the next five years. He noted that approximately $550 billion in AI-related debt has already been issued this year.

Roman described the total funding requirement as “gigantic,” particularly when compared to a global corporate bond market valued at roughly $20 trillion, warning that the scale could eventually become unsustainable.

These concerns align with a recent Goldman Sachs report, which estimated that global data center demand will necessitate approximately $8.5 trillion in capital spending over the coming five years.

According to Gray, funding this buildout will require a diversified approach involving public markets, traditional banks, and private capital. He noted that companies are increasingly utilizing structured transactions to manage their debt levels, while hyperscalers will use their own generated cash to fund a portion of the expansion.

“The creativity is needed because the scale of capital is enormous,” Gray remarked.

Despite these financial hurdles, Gray maintains a bullish outlook on AI infrastructure, asserting that the demand for computing power continues to far outstrip supply. He revealed that spending on AI models within Blackstone’s portfolio companies has increased 20-fold over the past year, as firms realize tangible financial gains from AI-driven coding, content creation, and customer engagement.

However, Gray acknowledged that meeting this demand remains a complex challenge, citing the increasing difficulty of securing permits, power, chips, capital, and viable physical sites.

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