Blackstone CEO Outlines Strategy to Counter AI Data Center Opposition

Blackstone is actively working to manage the social and environmental effects of the artificial intelligence boom, CEO Stephen Schwarzman said Thursday, as the firm confronts growing community resistance to new data center construction across the United States. The private equity giant and its peers are channeling tens of billions of dollars into the infrastructure required to power an expansion in computing capacity for AI models.

Navigating Community Concerns

Speaking on a conference call, Schwarzman acknowledged the public's concerns, stating, "Major change of this type also creates anxiety due to the uncertainty of how the technology will evolve." He said Blackstone is working with its portfolio companies to address these issues directly.

Key measures being implemented include:

• Creating union jobs and providing workforce training.
• Using water-free cooling systems to reduce environmental strain.
• Investing in expanded power generation.
• Making direct economic investments in local communities.

Schwarzman noted that AI's long-term impact could mirror the industrial revolution, which ultimately led to higher standards of living.

Investment Headwinds

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The push to address community backlash follows tangible setbacks for Blackstone's investments. QTS, a data center operator Blackstone acquired for $10 billion in 2021, terminated a planned project in Virginia earlier this month after years of development.

The cancellation came after the project faced significant local opposition and legal challenges, even after receiving approval from county authorities. This highlights the operational and financial risks that community resistance poses to the rapid build-out of AI infrastructure.

Political Landscape

Schwarzman, a longtime donor to Donald Trump, said he has been meeting with industry leaders and policymakers to discuss the challenges. He noted that the Trump administration views AI development as a critical area of competition with China but is also focused on protecting U.S. households from rising energy costs associated with the technology.

The CEO's comments underscore the complex balance private capital firms must strike between deploying capital to meet AI demand and navigating the environmental, social, and political hurdles of building power-intensive infrastructure.