Blackstone (BX.N) said on Thursday its massive investments in data centers would not be undermined by the low-cost artificial intelligence models from China's DeepSeek, as the need for physical infrastructure was still vital for AI.
The alternative asset manager, which has $80 billion worth of leased data centers, said its strategy for the segment was grounded in a "very prudent approach" and touted its partnerships with "some of the biggest companies in the world".
Investors in data centers, such as Blackstone, were expected to be some of the biggest beneficiaries of the AI boom as increasing adoption led to higher demand for such infrastructure.
Blackstone's president and Chief Operating Officer Jonathan Gray, in a post-earnings call with analysts, said the company was closely watching developments tied to DeepSeek.
However, he expects lower costs could yet lead to a wider adoption of AI, boosting demand for data centers.
"As usage goes up significantly, there's still a vital need for data centers. We still think it's a very important segment," Gray said.
His comments echo views from analysts at Jefferies earlier this week.
"In fact, we would be surprised to see hyperscalers slow their capex plans as the AI space just got even more competitive," they wrote.
DeepSeek's launch has triggered scrutiny from investors, who are expected to analyze tech giants' AI spending plans closely in the next few weeks.
CEOs of Microsoft (MSFT.O) and Meta (META.O) also defended massive AI spending this week saying it was crucial to staying competitive in the new field.
Blackstone shares were last down nearly 4% in afternoon trading.
