Blackstone bets big on AI infrastructure, says Indian IT firms can turn disruption into opportunity

Blackstone sees significant investment opportunities in India across artificial intelligence (AI) infrastructure, financial services, healthcare, renewable energy and manufacturing, with the private equity giant also remaining bullish on Indian information technology (IT) services firms despite concerns over AI-led disruption.

Jon Gray, president and chief operating officer of Blackstone, said digital infrastructure would be a key investment theme as AI adoption accelerates, creating demand for data centres, computing capacity and energy infrastructure. He also expects Indian IT companies to play an important role in helping businesses adopt AI and transform their operations.

“If you believe India is going to grow a lot, you look for where that growth will happen. I think it starts with digital infrastructure. AI is certainly going to grow, so we're focused on data centres, neoclouds, and creating compute capacity,” Gray said, speaking to CNBC-TV18.

He identified financial services, healthcare and credit as other areas of opportunity, driven by India's expanding middle class and rising demand for lending, wealth management and quality healthcare. Manufacturing is also gaining traction, particularly as India begins to focus more on export-oriented production.

Gray cited Blackstone's investment in automotive components maker Sona Comstar, which has exposure to the electric vehicle ecosystem, as an example of the opportunities emerging in Indian manufacturing.

Blackstone sees AI infrastructure as a key investment theme

Blackstone's focus on AI-linked infrastructure comes amid growing demand for computing capacity as companies increasingly deploy AI applications. Gray said the expansion of this infrastructure would also depend on access to reliable energy, highlighting the potential for renewable energy and solar power in India.

The investment firm is also looking at opportunities to expand its presence across sectors benefiting from economic growth. Gray said Blackstone has approximately $50 billion invested in Indian real estate and companies, with a target of doubling that amount to $100 billion over the next five years.

“There are lots of great companies we're looking at. As long as the economy continues to grow, and the government continues to support that growth with policies that give foreign investors certainty and clarity, I think the opportunity set will grow,” he said.

Blackstone pushes back against pessimism on Indian IT

Gray also challenged the negative sentiment surrounding Indian IT services companies, arguing that investors may be underestimating their ability to adapt to AI and capitalise on the technology's adoption.

“I think the market is a little too negative on the sector because it assumes these companies are static — that they've always made, let's say, vanilla ice cream and can't make chocolate ice cream,” Gray said.

According to Gray, Indian IT companies have the talent, systems and technological expertise needed to evolve as AI changes the nature of technology services. Rather than viewing the technology solely as a threat, he believes these companies can help clients integrate AI into their businesses and redesign workflows.

“The nature of what they do is going to change,” he said, adding that companies capable of sustaining strong revenue and earnings growth could see their valuations recover.

Gray acknowledged that the transition would require management teams to adapt, warning that businesses that fail to embrace AI risk falling behind. However, he sees the shift as an opportunity for companies that can successfully incorporate the technology into their operations and help clients do the same.

“If these companies can show they can continue to deliver strong revenue and earnings growth, they could be re-rated upward,” he said.

Gray also expressed confidence in India's broader AI potential, pointing to its technological capabilities and skilled workforce. While AI model development remains concentrated in the United States and China, he expects Indian companies to play a significant role in deploying the technology.

“I think India’s focus on digital infrastructure will start to gain momentum,” he said, adding that Indian IT companies could lead in AI deployment.

For Blackstone, the opportunity lies in identifying businesses that can adapt to technological change while benefiting from India's economic expansion. Gray said the firm would continue to take a long-term approach, backing companies and management teams capable of growing with the market.