Blackstone’s Jas Khaira says fears over AI-buildout debt are overblown

Key points

• Jas Khaira, a Blackstone veteran who leads its AI hub Blackstone N1 in San Francisco, said concerns about debt from the AI buildout are overblown.
• Blackstone, with $1.3 trillion in assets under management, has become the largest owner of compute outside the hyperscalers, according to Khaira.
• Rising interest rates and wider credit spreads have hit the sector, with CoreWeave shares dropping over 20% and Firmus scrapping its planned ASX IPO.

Blackstone veteran Jas Khaira said last week at TechCrunch Disrupt that fears over debt tied to the AI buildout are overblown. Khaira leads Blackstone N1 (BXN1), the firm's San Francisco-based hub for its AI initiatives, and relocated from New York to lead it.

Blackstone, which has $1.3 trillion in assets under management, is financing AI through loans to data centers and investments in frontier AI models and applications. Khaira said the firm is "the largest owner of compute outside of the hyperscalers today."

CoreWeave deal set the model

Blackstone's first neocloud financing deal came in 2023 with CoreWeave, which sought a $2.3 billion loan when it had only "30 million of revenue and minimal profitability," according to Khaira. The loan was backed by CoreWeave's Nvidia GPUs and its contracts with blue-chip customers such as Microsoft, and the structure became a model for later neocloud lending.

Blackstone later co-led a $10 billion credit facility for Australian GPU provider Firmus alongside Coatue. Khaira said lenders assess risk based on the customer, pricing it relative to investment-grade names like Microsoft or Meta.

This doesn’t feel like something where you’ve got 2008 banks that are shaky credits.

— Jas Khaira

Market jitters and pushback

Khaira acknowledged that rising debt loads have raised red flags. CoreWeave's debt has grown to about $50 billion, and Altimeter Capital founder Brad Gerstner said on CNBC that its GPU collateral "is not good enough anymore." Khaira attributed market anxiety to higher interest rates in September, hotter inflation signals and a flood of AI infrastructure debt offerings.

CoreWeave shares fell over 20% in recent days, and Firmus scrapped its planned ASX IPO at a target valuation of roughly $30 billion. Khaira said the market was weighing the right price for neoclouds as rates move up, but he dismissed comparisons to 2008, saying most data center debt is backed by the world's most creditworthy companies.