Blackstone’s Jon Gray Says AI Buildout Needs More Equity as Pimco Cites $550 Billion in 2026 Debt
Blackstone President Jon Gray said Tuesday that funding the artificial intelligence buildout will take more equity, because lenders are becoming concentrated in the same companies, CNBC reported from the Hong Kong Monetary Authority's investor summit.
Pimco CEO Emmanuel Roman, on the same panel, warned that the total bill could be too large for markets to absorb.
Why Gray Wants Shareholders Alongside Lenders
Gray spoke at the Global Financial Leaders' Investment Summit in Hong Kong on Nov. 3. He said debt investors face concentration risk across the AI sector and within individual borrowers. Their returns are largely limited to interest and principal.
Shareholders can gain as a company grows.
"There’s going to be more equity needed across this space to keep up with these enormous demands," Gray told CNBC.
He said the money will come from public markets, banks and private capital. Companies will use structured transactions to hold down the debt they take on. Cash from hyperscalers, the largest cloud-computing companies, will cover part of the spending.
Gray remained bullish on demand. He said computing demand is "running well ahead of supply," according to Demokratis. Spending on AI models at Blackstone's portfolio companies rose 20-fold over the past year, he said.
Superpower Daily noted that figure does not describe the whole industry.
Pimco Cites a $10 Trillion Estimate
Roman cited an estimate from General Atlantic CEO Bill Ford that AI-related capital spending could reach about $10 trillion over five years. He said roughly $550 billion in AI debt had been issued in various forms so far in 2026.
He compared the five-year figure with a global corporate bond market of about $20 trillion.
Roman said at some point the borrowing will become too much, according to CNBC.
Demokratis reported that Roman also listed rising US interest rates, conflict in the Middle East and a eurozone crisis as possible triggers for wider financial instability.
Net Worth's earlier report on the 10-year Treasury yield covers how AI borrowing has reached the bond market.
Other Executives Offer Mixed Views
Demokratis said Bain Capital Chairman John Connaughton warned that some AI-related assets already carry elevated valuations. Franklin Templeton CEO Jenny Johnson observed something different.
Major cloud companies, she said, are shifting from relatively capital-light models toward much heavier investment.
Morgan Stanley CEO Ted Pick estimated AI infrastructure could need $10 trillion to $15 trillion over the next decade, adding 0.5 to 0.7 percentage points to real GDP growth. Pick acknowledged that projects with weak finances may not survive.
He called periodic corrections healthy. Goldman Sachs CEO David Solomon pointed to the gap between computing demand and supply.
Goldman Sachs estimated in a report published Monday that global data center development will need about $8.5 trillion in capital spending over five years.
Its Oct. 28 financing analysis, cited by Superpower Daily, quotes Mahesh Saireddy, global co-head of the Capital Solutions Group. He says he believes the buildout will get financed, but he warns of corrections.
Goldman also noted that the largest cloud companies carry relatively little debt. They generate strongly positive free cash flow.
Big Tech Cash Flow Data
Separate figures from S&P Global Market Intelligence, summarized by Ground News, show the pressure on the companies doing the spending. The five largest US tech companies reported record operating cash flow of $542.9 billion for the first nine months of 2026.
Their capital spending doubled to $556.9 billion. That left a combined free cash flow deficit of $14 billion, the first since 2011.
Those companies cut share repurchases 83% to $13.6 billion from $81.8 billion a year earlier. Dividends rose to $37 billion from $33.9 billion. Alphabet and Meta Platforms halted buybacks entirely in 2026. The five firms raised $326 billion in debt this year.
Amazon priced $25 billion in bonds on Oct. 29, its first US dollar bond sale since 2017.