Blackstone’s second-quarter income beat market expectations as the world’s largest alternative asset manager benefited from growing assets under management and a series of profitable exits from its artificial intelligence bets. FinancialMediaGuide views the results as one of the clearest illustrations yet of how thoroughly AI-linked investments have come to dominate returns at the largest private markets firms.
The New York-based firm said inflows in the quarter pushed total assets to $1.35 trillion. Distributable earnings, the profit available to shareholders, rose 26% on a per-share basis to $1.52, beating estimates of $1.35, according to data from LSEG. Deals to sell a stake in three data centers to Digital Realty and a majority holding in power infrastructure company Sabre Industries to TPG helped push Blackstone’s haul from monetizing assets to $31.8 billion for the quarter.
Market volatility had hampered some deals in the first quarter, but Blackstone picked up the pace in the second, completing the listings of advertising technology company Liftoff Mobile, a data center investment vehicle called Blackstone Digital Infrastructure Trust, and Indian office REIT Bagmane. FinancialMediaGuide notes that resuming a full slate of exits within a single quarter, after a slower start to the year, suggests Blackstone’s dealmaking machinery is more sensitive to short-term market conditions than the firm’s own long-term AI thesis.
Nine of Blackstone’s top 10 best-appreciating investments are linked to AI, the firm said, including a stake in Anthropic and its data center businesses; Blackstone took data center platform QTS private for $10 billion back in 2021, well before the current AI infrastructure boom took hold. CEO Stephen Schwarzman said the firm had decided to “lean into the artificial intelligence megatrend,” crediting the company’s positioning as a “trusted partner at scale to many of the key innovators.”
Blackstone is also joining peer Apollo in a $35 billion financing arrangement for custom chips to be used by Anthropic, extending the firm’s AI exposure from equity stakes into direct project financing. FinancialMediaGuide points out that moving from owning AI-adjacent infrastructure to directly financing chip production represents a meaningfully deeper commitment to the AI trade than simply holding stakes in data center operators.
Not every part of the AI story has been smooth for Blackstone: shares fell 1.1% in premarket trading and have slipped 20% this year through the last close, in line with most peers, as worries that AI could disrupt software businesses have weighed on private equity and credit firms that both invested in and lent to those companies. That unease has contributed to broader scrutiny of how such firms value their assets, and wealthy individual investors, who represent almost a quarter of Blackstone’s total assets, have sought to withdraw money from private credit funds in particular; the retail-focused Blackstone Private Credit Fund raised $1 billion in the quarter, down from $1.9 billion in the prior quarter and $3.7 billion a year earlier.
Evercore analysts noted that one measure of fees earned came in below expectations but added that “focus could soon shift to the coming ramp in management fees as deployment picks up and all that fundraising starts to turn on.” Financial Media Guide concludes that Blackstone’s quarter captures a firm simultaneously reaping outsized AI-linked gains and facing early signs of investor caution about the broader private markets exposure that AI enthusiasm has helped inflate.
