Jon Gray, President and COO of Blackstone, stated in a presentation to over a hundred investors that the current situation is closer to 1870 than the 2000 bubble: major industrial revolution-like changes are coming. Blackstone subsequently released the full speech titled "Where's the Beef?".

He cited that from 1870 to 1900, U.S. labor productivity doubled, GDP increased about fourfold, real manufacturing grew about sixfold, and the stock market rose about sevenfold, stating that this is not a prediction of today's growth but rather an illustration of the scale of technological diffusion. On the model company side, he mentioned that Anthropic and OpenAI had almost no revenue a few years ago, but by a certain July, revenue expanded about 100 times, showcasing an annualized revenue of approximately $105 billion, and noted that such speed is rare.

He used the portfolio ledger as validation. Among about 1,400 invested companies, holdings, and borrowers, Anthropic's annualized expenditure increased from about $25 million last September to about $525 million, approximately 21 times. He said that nine out of the ten highest-grossing investments for the company that quarter were concentrated in artificial intelligence. The capital expenditures of five major cloud companies doubled from about $415 billion last year to about $820 billion, equivalent to about 2.5% of U.S. GDP.

Blackstone's own data center platform is expected to lease about 1 GW in 2024 and about 2 GW in 2025, with a target of at least about 6 GW that year, corresponding to nearly $100 billion in capital expenditures for the data centers, and tenants are expected to invest about $200 billion more in chips. He compared SK Hynix's approximately 4 times price-to-earnings ratio with Cisco's approximately 150 times in 2000, stating that today energy and data centers have demand exceeding supply, with contract counterparties having low leverage, unlike the over-leveraged railroads of the past.

Micro examples include a communication tower company investing about $4 million in AI processes, generating annual revenue of about $4.5 million, and the energy data company Enverus demonstrating a project with about 18 times return. U.S. labor productivity has risen from an average of about 1.5% over the past decade to nearly 2.6% over the last two and a half years. Physical bottlenecks were specifically pointed out: General Electric's Vernova turbines are queued until 2031, costing about $55 billion per GW of power. Retail comparisons include Kmart and Sears exiting, while Walmart and Costco survive. The strategy is to bet on foundational chips, data centers, and power, as well as results-oriented record systems.

The market mechanism is the allocation of infrastructure rights. Buyers are model companies and cloud providers looking to lock in machines, while sellers are alternative asset managers holding land, power queues, and leasing platforms. Event-driven opportunities arise from official releases. Beneficiaries are data centers and credit packaging with long-term leases, while those under pressure are equity themes that still view AI as a purely software story without physical positioning. Funds are flowing from model subscription fees to cement, turbines, and custom chip leasing.

Source: Public Information