SerpApi.Org
Blackstone’s profits are being powered by AI.
The investment giant’s earnings surged in the second quarter, as it reaped in revenue from its investments in the country’s massive artificial-intelligence build-out that span all of the firm’s major businesses, including its private-equity, private-credit and real estate units.
Stronger inflows in its private-equity and other businesses helped offset a slowdown in its private-credit unit, which has been contending with a pullback in interest among individual investors.
The firm’s distributable earnings, a closely tracked metric for publicly traded investment firms that pay dividends, rose to $1.98 billion, or $1.52 a share. That is up 26% from $1.57 billion, or $1.21 a share, a year ago.
Blackstone’s infrastructure investing unit was a standout in the quarter, producing gross returns of 7.2%, outpacing the firm’s other investment areas.
Its broader private-equity business also benefited from the firm’s yearslong AI-related investments. The division includes a fund for wealthy individuals with stakes in SpaceX, which went public in June, as well as Anthropic and OpenAI, which could go public as early as this year.
Blackstone has become one of the biggest investors in data centers and the broader AI build-out. Its credit and insurance business is partnering with Broadcom to launch a platform backed by an initial $35 billion to finance AI infrastructure. Apollo Global Management is also in that deal.
Earlier, Blackstone and Google said they plan to create an AI cloud company to rival the likes of CoreWeave using Google’s specialized chips. The partnership involves $5 billion in equity capital from Blackstone.
In Blackstone’s private-credit business, inflows slowed for the second straight quarter to $31 billion, showing the industry’s recent struggles aren’t confined to surging redemption requests from individual investors. The firm says it isn’t seeing a slowdown from institutional investors, which make up much of its investor base.
Individual investors and their wealth managers shifted to other private assets. Blackstone’s private equity and real estate inflows both rose.
Blackstone’s fee-related earnings, another metric watched by analysts, climbed 22% to $1.78 billion, or $1.43 a share.
Total revenue jumped 36% to $5.04 billion, while total assets under management increased 11% to nearly $1.35 trillion.
Write to AnnaMaria Andriotis at [email protected]