{"id":224407,"date":"2025-10-19T05:15:09","date_gmt":"2025-10-19T05:15:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/224407\/"},"modified":"2025-10-19T05:15:09","modified_gmt":"2025-10-19T05:15:09","slug":"blackstone-says-wall-street-is-complacent-about-ai-disruption","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/224407\/","title":{"rendered":"Blackstone says Wall Street is complacent about AI disruption"},"content":{"rendered":"

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Wall Street investors are underestimating artificial intelligence\u2019s potential to make entire industries obsolete, Blackstone\u2019s president has said, adding that the impact of the technology was now \u201ctop of our list\u201d when evaluating deals. <\/p>\n

Jonathan Gray said that understanding AI risks has become a priority for the private capital group when assessing investments, with the technology already upending business models and causing job losses. <\/p>\n

\u201cWe\u2019ve told our credit and equity teams: address AI on the first pages of your investment memos,\u201d said Gray at the Financial Times Private Capital Summit<\/a> in London this week. <\/p>\n

High valuations of lossmaking AI companies, and the circular financial relationships between many key players, have fuelled concerns about a bubble<\/a> in the sector. <\/p>\n

Gray said investor exuberance meant it was inevitable that there would be some misallocation of capital to AI companies \u2014 \u201cthink of Pets.com in 2000\u201d. But he added that the scale of the technology\u2019s impact meant investors may still underestimate its potential to crush entire industries.<\/p>\n

FT interview with Blackstone\u2019s Jonathan Gray<\/p>\n

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Jonathan Gray says private capital group has put risks from the technology \u2018top of our list\u2019 when evaluating deals.<\/p>\n

\u201cPeople say, \u2018This smells like a bubble,\u2019\u201d but they\u2019re not asking: \u2018What about legacy businesses that could be massively disrupted?\u2019\u201d said Gray. <\/p>\n

\u201cIf you think about rules-based businesses \u2014 legal, accounting, transaction and claims processing \u2014 this is going to be profound,\u201d he added.<\/p>\n

Gray compared the looming disruption to New York City taxi licences, which grew almost 500-fold in value over many decades, before swiftly losing 80 per cent of their value when ride-hailing apps Uber and Lyft disrupted the market.<\/p>\n

Gray said Blackstone had elevated AI risks to the \u201ctop of our list\u201d when assessing the potential downside of investments.<\/p>\n

\u201cWe\u2019re spending enormous time on both new deals and, importantly, our existing portfolio: what does AI mean for enterprise software, for service businesses handling data and for rules-based work?\u201d he added.<\/p>\n

The rise of AI algorithms created by OpenAI, Microsoft and Google is already disrupting white-collar sectors such as accounting, consulting and law, and threatening business models of companies such as advertisers, publishers and software groups. <\/p>\n

Machine -learning technology is also threatening manual jobs in areas such as manufacturing.\u00a0<\/p>\n

Blackstone, an early and prolific investor in the data centres used by OpenAI and others to power large language models, has been assessing AI risks for years. It has recently decided not to buy some software and call-centre companies seen as vulnerable to AI-related risks, according to people briefed on the matter.<\/p>\n

Blackstone has also invested heavily in utility companies that power data centres, even repositioning some of its industrial portfolio companies such as Copeland and Legence to sell products to providers of AI infrastructure.<\/p>\n

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Despite its evaluation of AI-related risks, some of Blackstone\u2019s investments are exposed to the impact of technological change. Its private credit business has lent billions of dollars to enterprise software companies, including Medallia, that risk losing customers to AI-driven competitors. <\/p>\n

Gray said that while AI would create some negative economic disruptions, the technology could also yield underestimated productivity benefits for large corporations and the global economy, creating trillions of dollars in new corporate wealth. So he has challenged dealmakers to also not miss AI-related opportunities.<\/p>\n

\u201cWe\u2019re forcing the conversation. We don\u2019t claim to know exactly how it all plays out. But if every deal team has to analyse AI impact then it\u2019s the number-one topic in the room,\u201d he said.\u00a0<\/p>\n

\u201cActing like it\u2019s business as usual would be a mistake,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Artificial intelligence myFT Digest — delivered directly to…\n","protected":false},"author":2,"featured_media":224408,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-224407","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/224407","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=224407"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/224407\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/224408"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=224407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=224407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=224407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}