Speaking on CNBC's Squawk Box Thursday, Blackstone COO Jon Gray said neocloud firms are wrestling with how to finance the buildout they promised.
That stress has shown up across CoreWeave's capital stack in recent days, with the stock sliding, bond yields moving higher and credit default swap spreads widening as investors question how it will fund data centers and at what price. The company's total obligations are about $51.6 billion, of which roughly $35 billion consists of notes, bonds, and loans.
Shares fell 3.55% on Thursday and have dropped 14% over the past week.
Gray said compute demand remains robust across Blackstone's private holdings, even as adding capacity is constrained. For those neocloud operators that make it through the current crunch, "the pricing of compute is up 50%," he said, adding that older chips are more valuable than expected and many data center leases sit below current market rates.
He also pointed to cross-currents like a higher cost of capital, government deficits and capital being pulled toward AI infrastructure. Even so, he said the backdrop for the economy and corporate profits remains solid.
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Blackstone reported third quarter revenue of $3.22 billion versus $3.28 billion expected by LSEG-polled analysts, while adjusted earnings came in at $1.32 per share, topping the $1.26 consensus. "Across the board, our flagship strategies beat comparable public market indices and that's what we care most about," Gray said. The shares advanced 4% on Thursday.
Looking ahead, Gray said he anticipates a solid fourth quarter and 2027. He expects initial public offerings to pick back up once markets and geopolitics settle down, and said investors should be patient.
The setup is a classic squeeze: robust demand for compute and firmer pricing on one side, tight financing and higher yields on the other. That tension is already hitting asset prices, from CoreWeave's stock slide to wider credit spreads. Meanwhile, Blackstone's print beat on earnings and the firm sees a reopening in IPOs once volatility cools. The bottom line: AI infrastructure is still pulling capital, which can pressure borrowers now even as it supports long run revenue growth for the providers who endure.
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