Blackstone’s Jas Khaira pushes back on fears of an AI debt crisis

Blackstone executive Jas Khaira is defending the debt financing AI’s infrastructure boom, even as borrowing grows more expensive and returns from adoption remain uneven. In an onstage interview at TechCrunch Disrupt, published October 21, he argued that financially strong technology customers distinguish today’s data-center lending from the shaky bank credit behind the 2008 crisis.

Khaira’s argument comes from a firm with substantial exposure to that buildout. He described Blackstone as the largest owner of computing capacity outside the biggest cloud companies, citing investments in data centers and specialized AI cloud providers. That is his assessment of Blackstone’s position, not an independently verified ranking.

The firm can provide both loans and equity investments rather than relying on venture capital alone. Its commitments include $5 billion to Crux AI, a cloud provider launched with Google to commercialize Google’s custom AI processors. Blackstone also co-led a $10 billion credit facility for Australian GPU provider Firmus alongside Coatue.

Lending against customers, not just chips

Khaira traced Blackstone’s approach to a $2.3 billion loan to CoreWeave in 2023. At the time, he said, the specialized cloud provider had only $30 million in revenue and minimal profitability. It nevertheless had two assets that helped support a much larger loan: Nvidia graphics processors pledged as collateral and contracts with customers including Microsoft.

Those providers, often called neoclouds, rent out AI computing infrastructure. Blackstone’s structure assessed both the hardware securing the borrowing and the customer commitments expected to generate revenue. The CoreWeave transaction became a model for billions in subsequent lending by Blackstone and other credit providers to CoreWeave and its rivals.

Strong customers do not mean cheap borrowing

The scale of borrowing has drawn criticism. TechCrunch put CoreWeave’s debt at about $50 billion and cited Altimeter Capital founder Brad Gerstner’s warning in a recent CNBC interview that GPU collateral was no longer sufficient. His objection challenges the hardware side of the financing model, while Khaira emphasizes the customers behind the contracts.

Khaira acknowledged that financing conditions have worsened. He pointed to rising interest rates, inflation pressure and a flood of AI infrastructure debt offerings. Lenders are also demanding higher credit spreads—the extra interest charged above base rates. Even Microsoft and Meta face higher borrowing premiums, he said.

Firmus’s abandoned Australian listing shows another constraint. The company had targeted a valuation of roughly $30 billion. Khaira said the market would not support that price, describing investors as reassessing what neocloud businesses should be worth while interest rates rise. His defense of the debt did not extend to endorsing every valuation.

On the business use of AI, Khaira offered a more qualified assessment than a simple boom narrative. Asked about Blackstone-owned companies, he said there was “definitely ROI,” meaning a return on investment, but that it was uneven. He described adoption as following a “sawtooth-type pattern”: periods that can look like excess computing supply before use catches up. That was his explanation for the mismatch, not a timetable for when adoption would justify the infrastructure spending.