Blackstone creates dedicated AI division to manage OpenAI, Anthropic investments

Blackstone Forms New Unit to Oversee AI, High-Growth Tech Bets

Blackstone Inc. is folding its growth business into a new West Coast-based division that will focus solely on the alternative investment giant's artificial intelligence portfolio, which includes OpenAI and Anthropic PBC. The new group, Blackstone N1, will be led by veteran executive Jas Khaira, who will relocate to San Francisco from New York. Khaira will continue to lead the Americas for the firm's Tactical Opportunities business and serve on its investment committee. He'll take over as head of Blackstone Growth, replacing Jon Korngold, who's leaving the company. Blackstone is creating the unit to back AI and high-growth tech bets and serve as a centralized resource on AI investing for other businesses at the firm, according to an internal note viewed by Bloomberg News. BXN1 will oversee Blackstone's AI and technology investments for BXPE, its private equity fund for the wealthy, as well as its growth and Tactical Opportunities businesses. "AI is reshaping every business at the firm, and we need a dedicated, focused team positioned at the center of this critical area to further bolster our current presence on the West Coast, where the most innovative AI and technology companies are being built," Chief Executive Officer Steve Schwarzman and President Jon Gray wrote in the memo. Blackstone is already the largest private asset investor in AI across its business lines. In addition to its holdings in AI producers, the firm owns the largest operator of data centers in the US and some of the utilities that power them. The integration of the firm's growth business into a new division marks the second such move since 2023, when Blackstone consolidated its credit and insurance units into a single business to bolster its lending prowess. It also underscores Blackstone's AI ambitions. The build-out of artificial-intelligence infrastructure is the single-biggest driver for the $1.3 trillion manager, and eight of its 10 best-performing investments in the last quarter fell within the AI ecosystem. Read more on Blackstone's AI ambitions: Khaira has led or co-led more than 50 transactions, including the early build-out of the digital infrastructure portfolio that laid the foundation for the firm's AI infrastructure investments, the note said. BXPE will continue to be led by Viral Patel, while Chris James remains head of Tac Opps. Patel and James will continue to report into Joe Baratta, global head of Blackstone Private Equity Strategies, a spokesperson for the firm said. BXPE's structure gives it flexibility to back companies that don't fit the criteria of its flagship funds, such as SpaceX, Anthropic, OpenAI and CoreWeave Inc. The Tac Opps group has provided CoreWeave with financing backed by graphic processing units, or GPUs. Blackstone owns more than 270 companies and 12,500 real estate assets, which gives the firm insights into how AI is changing the economy, the note said.

Blackstone Builds New AI Division Around OpenAI, Anthropic Bets - Blackstone (NYSE:BX)

* Blackstone shares are under pressure. What's pulling BX shares down? Jas Khaira will lead the newly formed Blackstone N1 division and relocate from New York to San Francisco to head the firm's new West Coast-based team, Bloomberg reported. Khaira will take over as head of Blackstone Growth, succeeding Jon Korngold, who is departing the firm. He will also maintain his original position as leader of Blackstone's Tactical Opportunities business in the Americas and will continue to serve on its investment committee. BXN1 will be responsible for guiding Blackstone's investments in AI and technology across BXPE, the firm's private equity strategy for affluent investors, in addition to overseeing its Growth and Tactical Opportunities divisions. Viral Patel will maintain the leadership of BXPE, and Chris James will remain in his position as head of Tactical Operations. Both Patel and James will still report to Joe Baratta, global head of Blackstone Private Equity Strategies, Bloomberg noted. Blackstone has been rapidly increasing its presence in AI, establishing itself as a major investor in the sector. Building on its substantial data center portfolio, the firm is now prioritizing AI infrastructure as a key source of future returns. "AI is reshaping every business at the firm, and we need a dedicated, focused team positioned at the center of this critical area to further bolster our current presence on the West Coast, where the most innovative AI and technology companies are being built," CEO Steve Schwarzman and President Jon Gray wrote in the memo, cited by Bloomberg. In 2021, Blackstone invested in Vectra, a company that uses AI to stop in-progress cyberattacks in the cloud. In the same year, Blackstone also invested in Ontra, a company that builds AI-powered solutions that digitally transform legal workflows in the private investment industry. Photo: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.