Blackstone’s Jon Gray on AI, IPOs, and Real Estate: Where to Play Now

Why Blackstone’s latest market views matter for your fund

The private markets are at an inflection point. Blackstone’s President & COO Jon Gray’s latest market commentary isn’t just another macro take. It’s a playbook for where capital is being deployed, where returns are being generated, and where risks are accumulating. For venture funds, growth-stage investors, and LPs, Gray’s insights offer a rare blend of data and conviction on three critical fronts: the AI ecosystem, IPO activity, and real estate. The stakes are high. Funds that align with these trends early will capture outsized returns, while those caught on the wrong side of the cycle risk underperformance.

Here’s what Gray’s analysis reveals — and how you should act on it.

The AI Ecosystem: Infrastructure as the New Moat

Gray’s emphasis on Blackstone’s investments in the AI ecosystem is a signal that the next wave of value creation won’t come from foundational model companies alone. Instead, it’s the infrastructure layer — data centers, energy, and enabling technologies — that’s driving outsized returns. This is a critical distinction for founders and investors alike.

Data Centers: The Physical Backbone of AI

Data centers are the new oil rigs. Gray highlights Blackstone’s exposure to hyperscale data center operators, which are benefiting from insatiable demand for compute power. The numbers back this up:

• Global data center capacity is projected to grow at a 15% CAGR through 2030, with AI workloads accounting for 40% of total demand by 2027 (Blackstone, 2026).

• Hyperscalers like NVIDIA’s partners are locking in long-term leases at premium rates, creating predictable cash flows for infrastructure owners.

• Power constraints are becoming a bottleneck. Gray notes that Blackstone’s energy investments are co-located with data centers to ensure reliable, cost-effective operations.

For funds, this means:

• Focus on data center REITs and private operators with exposure to hyperscale workloads.

• Invest in energy infrastructure that supports AI compute, such as microgrids and co-located power generation.

• Avoid overcrowded segments, like early-stage AI chip startups, where valuations have outpaced fundamentals.

Foundational Model Companies: Valuations Still Stretched

While Gray’s optimism about the AI ecosystem is clear, he’s cautious about the valuations of foundational model companies. Blackstone’s approach — backing infrastructure rather than pure-play model providers — reflects a broader trend in private markets. Founders should take note:

• The average pre-money valuation for AI model startups has doubled in the past 18 months, with many still burning cash at unsustainable rates.

• Gray points to Blackstone’s investments in companies like CoreWeave and Vantage Data Centers as examples of where capital is flowing instead.

• For LPs evaluating funds, this means prioritizing managers with a clear thesis on infrastructure over those chasing the latest AI hype.

IPOs: The Rebound You’ve Been Waiting For

Gray’s bullishness on IPO volumes is one of the most consequential takeaways from his commentary. After years of stagnation, the public markets are thawing — and with them, a path for private companies to exit at attractive valuations.

The Catalysts for a 2026 IPO Surge

Gray cites three key drivers behind the expected uptick in IPOs:

• Macro stability: Despite geopolitical risks, Gray expects inflation to moderate further, reducing pressure on the Fed to keep rates elevated.

• Corporate earnings growth: Blackstone’s proprietary data shows that S&P 500 earnings are on track to grow 8% in 2026, up from 4% in 2025.

• Dry powder deployment: Private equity firms are sitting on record levels of uncalled capital. Gray estimates that $1.2 trillion in dry powder will drive M&A and IPO activity in the next 18 months.

Where to Look for IPO Candidates

For funds and founders, the IPO rebound presents opportunities and risks. Gray’s advice is to focus on sectors where public markets are rewarding growth:

• AI infrastructure: Companies like data center operators and semiconductor equipment makers are prime candidates for IPOs in 2026.

• Healthcare tech: Regulatory clarity and strong demand are making this a hot sector for public listings.

• Consumer brands with digital moats: DTC companies that have scaled efficiently and built defensible customer relationships are gaining investor interest.

Founders should prepare for IPOs by:

• Rationalizing burn rates to align with public market expectations.

• Building diversified revenue streams to reduce reliance on a single product or customer.

• Engaging with underwriters early to ensure a smooth roadshow process.

Real Estate: Green Shoots in a Recovering Market

Real estate has been a laggard in the post-pandemic recovery, but Gray sees early signs of stabilization. For funds and LPs, this could be a signal to re-enter the sector — selectively.

The Demand-Supply Imbalance

Gray highlights two trends that are supporting real estate valuations:

• Declining new supply: Construction costs and financing constraints have slowed new development, particularly in multifamily and industrial properties.

• Growing demand: Urban migration and remote work flexibility are driving demand for well-located, amenity-rich properties.

Where to Invest in Real Estate Now

Gray’s real estate strategy is focused on assets that benefit from structural tailwinds:

• Industrial/logistics: E-commerce continues to drive demand for last-mile distribution centers.

• Multifamily: Urban cores are seeing renewed interest as hybrid work models stabilize.

• Life sciences: The sector remains resilient due to long-term demand for lab space.

For funds, this means:

• Avoiding overleveraged properties in declining markets.

• Focusing on operational improvements to drive NOI growth.

• Targeting secondary markets with strong demographic trends.

The Bottom Line: Where Capital Goes Next

Gray’s commentary is a roadmap for where capital will flow in the next 18-24 months. For funds and founders, the key takeaways are clear:

• AI infrastructure is the new gold rush, but the winners will be those building the pipes, not just the apps.

• IPOs are back, and the best companies will be those that can demonstrate sustainable growth and profitability.

• Real estate is stabilizing, but selectivity is critical in a market where financing remains tight.

The private markets are not immune to macro risks, but Gray’s optimism is rooted in data, not hype. Funds that align with these trends — and founders that build businesses to capitalize on them — will be the ones that thrive in the years ahead.

What to do next: Revisit your fund’s thesis against Gray’s framework and adjust your deployment strategy accordingly.