President of the PE giant Blackstone: Wall Street Underestimates the Disruptive Power of AI, Now, When Investing in Projects, the First Thing to Evaluate is the "Disruption Risk".

Wall Street underestimates the disruptive power of AI in overturning traditional business models and market structures. Jonathan Gray, president of Blackstone Group, has warned that Wall Street investors underestimate the potential for artificial intelligence to render entire industries obsolete. The world's largest private equity firm has elevated AI risk assessment to a top priority in investment decision-making, requiring all trading teams to outline the impact of AI on the cover page of investment memos. Speaking at the Financial Times Private Equity Capital Summit in London this week, Gray stated that AI technology is already beginning to disrupt business models and lead to unemployment. He pointed out that while the market is concerned about the possibility of overvalued AI companies forming a bubble, investors should be more focused on the massive disruptive risks faced by traditional industries. He specifically emphasized that rule-based businesses such as legal, accounting, transaction processing, and claims processing will face "profound" impacts. According to sources, Blackstone recently decided not to acquire software and call center companies that were seen as easily influenced by AI risks. At the same time, the company is repositioning some of its industrial investment portfolio companies to seize opportunities created by AI infrastructure. AI disruption risks take precedence Blackstone has elevated AI risk assessment to the highest priority in investment decision-making. Gray explicitly requires credit and equity teams to outline the impact of AI on the cover page of investment memos, stating: "We have spent a lot of time looking at both new transactions and existing portfolio companies: what does AI mean for enterprise software, data processing services, and rule-based work?" As an early and investor of data centers used by companies like OpenAI, Blackstone has been evaluating AI risks for years. The company is conducting a comprehensive review of new transactions and existing portfolio companies. Gray warned that while investors are concerned about an AI bubble, they are overlooking the massive disruption that traditional businesses may face. He said: "People say 'this smells like a bubble', but they're not asking: 'what about traditional businesses that could be massively disrupted?'" He specifically pointed out that AI algorithms created by OpenAI, Microsoft, and Google are already beginning to disrupt white-collar industries such as accounting, consulting, and law, and threatening the business models of advertisers, publishers, and software companies. Gray likened this disruption to the fate of New York taxi medallions, whose value grew nearly 500 times over decades, only to rapidly lose 80% of their value after market disruption by ride-sharing apps. Machine learning technology is also threatening jobs in industries like manufacturing. Two-way adjustment in investment strategy While Blackstone is evaluating AI risks, some of its investments still face the impact of technological change. The company's private credit business has provided billions of dollars in loans to enterprise software companies like Medallia, which face the risk of losing customers to AI-driven competitors. At the same time, Blackstone is also actively positioning itself for AI opportunities. The company has made significant investments in utility companies that provide power to data centers, and has even repositioned industrial investment portfolio companies like Copeland and Legence to sell products to AI infrastructure providers. Gray stated that while AI will cause some negative economic disruptions, the technology also has the potential to bring underestimated productivity gains to large companies and the global economy, creating trillions of dollars in new business wealth. Therefore, he urged trading teams not to miss out on AI-related opportunities. He said: "We do not dare say we know exactly how everything will unfold. But if every trading team must analyze the impact of AI, then it is the number one topic in the meeting room." Translated from source: Wall Street Seen and Heard, Author: Li Jia, GMTEight Editor: Chen Qiuda