Blackstone Launches BXN1 AI Unit, Doubling Down on Data-Center and Infrastructure Investments

Blackstone has formed a new investment unit dedicated to artificial intelligence and high-growth technology sectors, the New York-based asset manager announced in an internal memo signed by Chairman and Chief Executive Stephen A. Schwarzman and President and Chief Operating Officer Jonathan Gray, according to a report by WSJ Pro Private Equity.

The unit, called Blackstone N1 — or BXN1 — will be led by Jas Khaira, a senior managing director who has been designated global head of the new platform. Khaira is relocating from New York to San Francisco, where BXN1 will be headquartered, as Blackstone seeks to strengthen its presence near what the memo described as the center of AI and technology company formation on the West Coast.

A Unified Platform for AI and Growth Investing

BXN1 absorbs the growth-investing strategy previously led by Jon Korngold, Blackstone's global head of growth, who the memo said has decided to leave the firm after a transition period. Korngold joined Blackstone in 2019 from General Atlantic.

"We are establishing BXN1 as Blackstone's unified platform for growth, hybrid and perpetual private-equity investing in the AI ecosystem and high-growth technology sectors," Schwarzman and Gray said in the memo.

The new unit will oversee AI investments drawn from Blackstone's growth and opportunistic strategies, as well as private-equity funds tailored to individual investors. The memo also described BXN1 as "an important resource for our other businesses for intelligence, networks and sector insights."

Data-Center Assets at the Core

Schwarzman, speaking during the firm's most recent quarterly earnings call, said Blackstone holds more than $150 billion in data-center assets — including sites under construction — with an additional $160 billion in potential new projects. The firm backs data-center operators including QTS Data Centers and CoreWeave.

"We believe Blackstone has become the largest investor in AI-related infrastructure in the world," Schwarzman said during the earnings call.

While many large private-markets investors have emphasized recent bets on AI-related infrastructure, the source reporting noted that no other firm has centered so much of its overall strategy on the technology, reflecting Schwarzman's personal support for its development.

Power Infrastructure and the TXNM Energy Acquisition

Alongside data-center investments, Blackstone has pursued the power infrastructure that AI computing demands. Schwarzman described the firm as one of the most active private investors in the U.S. electric grid and the utility sector over the past several years.

Last year, Blackstone agreed to acquire New Mexico power utility TXNM Energy in a roughly $11.5 billion deal that remains under routine regulatory review. Schwarzman also cited Blackstone's investment in a network of U.S. natural-gas pipelines, which he said would account for approximately half of the power supplied to the nation's data centers within the next five years.

"We've also become one of the largest investors in the modernization and growth of the U.S. electric grid," Schwarzman said. "Specifically, we are the most active private investor in the utility sector over the past several years."

Physical Assets as an AI Hedge

Blackstone's leaders acknowledged during the earnings call that drops in the value of some of the firm's software assets weighed on private-equity returns in the first quarter of the year. Schwarzman said there will be "winners and losers" in software as AI reshapes the sector.

However, he pointed to Blackstone's portfolio of physical assets — including warehouses, transportation, residential property, communications infrastructure, and asset-backed credit — as areas that provide resilience against AI-driven software disruption while benefiting from their own demand tailwinds.

"Overall, we believe Blackstone is extraordinarily well positioned for an AI-enabled future," Schwarzman said.

Blackstone also disclosed investments in AI model developers Anthropic and OpenAI, primarily through its wealth platform, as well as a position in SpaceX, which earlier this year acquired xAI.

Schwarzman noted his personal involvement in the AI sector dating to 2015 and said he has pledged more than $500 million of his personal fortune to fund AI education and research at institutions including the Massachusetts Institute of Technology and Oxford University.

Bloomberg News earlier reported the creation of BXN1, citing the same internal memo.

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Sources: Blackstone / WSJ Pro Private Equity — "Blackstone Adds New Unit to Focus Its AI Momentum"