Blackstone President Warns: Europe's Fiscal Risks Are More Urgent Than America's, AI Investment Creates Growth Space for the U.S.

Blackstone Inc. (BX.US) President Jon Gray warned that fiscal pressures in France, the UK, and other parts of Europe pose a more urgent risk than those in the U.S., which is underpinning its economic growth through technology investment. "The U.S. is going to have to face tough choices, but I think right now this is more of a challenge in France, the UK, and continental Europe," Gray said Tuesday at the Bloomberg New Economy Forum in New Delhi. "The reason is simply that growth rates there are much lower," along with "very large deficits." Gray's remarks come as major developed economies struggle with surging debt burdens and elevated interest rates. He said fiscal crises often only get resolved when market pressure forces the issue, citing Greece's debt restructuring more than a decade ago as an example. "Governments with deficits exceeding 100% of GDP today seem unable to find a path to bend that curve," Gray said. "This leads to affordability challenges, especially in housing, and means difficult trade-offs must be made on taxes and social services." For now, Gray said, the U.S. is temporarily keeping its rising debt problem below the surface through faster growth driven by the AI boom. "When you look at this technology, these investments, and what's happening with AI, you see it bringing in massive capital inflows, and higher growth rates give you a bit more room," he said. Gray believes technology is the most decisive force of our timeand also a potential threat. By comparison, he said, ongoing regional conflicts and tensions between the U.S. and its allies are still manageable. "Technology is probably the biggest existential risk, but it's slow-moving and will force people to make very difficult choices," he said during a panel discussion alongside Tata Chairman Natarajan Chandrasekaran and former UK Prime Minister Rishi Sunak. To address this shift, Gray said Blackstone remains firmly committed to investing in energy and digital infrastructure. "Blackstone will continue to be heavily long on power, because everything we're talking about related to technologydata centers, autonomous vehicles, Siasun Robot&Automationall of it needs electricity," he said. The company will also maintain high exposure to the defense sector. Gray said defense spending has become a near-universal priority for governments, with almost every country investing more in its own resilience. Life sciences is an area where Blackstone will "continue to double down." He said AI's contributions will improve human health, even though risk topics currently dominate the discussion. "We're all rightly focused on the risks of this technology, but its benefits to human health will become its foremost achievement," Gray said, adding that realizing these gains will still require extensive clinical trials. India Investment Regarding India, Gray said his company plans to deploy more capital because of India's young and large population, high English proficiency, large number of engineering and technology graduates, and government support for growth. He said that over the next century, India "will grow faster than any other major economy in the world." Gray said last month that India is Blackstone's highest-returning source of private equity returns globally. The firm has shifted toward acquiring majority or equal control and focused on areas including IT services, commercial real estate, and domestic manufacturing. Blackstone has rapidly expanded its AI investments and is already seeing returns. Gray told investors last month that nine of Blackstone's top 10 performing portfolio companies this year came from the AI sector. However, its Indian hospital portfolio company Aster DM Quality Care Ltd. also broke through the global AI frenzy, highlighting Blackstone's conviction that the country still has significant growth potential. Over the past year, Blackstone has invested in Indian AI cloud startup Neysa, Indian Premier League cricket team Royal Challengers Bengaluru, and Federal Bank Ltd.