Blackstone And AI

 

Blackstone, the world's largest alternative asset manager with 1.2417 trillion USDs in private equity, real estate, private credit, hedge funds assets under management invests large portion of its newly raised funds in artificial intelligence, AI projects like AI data centers and private equity buyouts of AI technology companies, according to Wolfteam Ltd.'s estimates.

The fact that AI is a focus point of Blackstone's new investments is even stated on its website.  

Blackstone is basically forced along with the other leading private equity firms like KKR, Apollo, Carlyle, Ares, CVC to invest in artificial intelligence, since AI related investments in companies like Microsoft, Alphabet, Meta and Amazon have been beating the general US stock market  for several years now and in addition artificial intelligence is being forecast by Wall Street analysts and investors and Silicon Valley technologists and investors as the fourth industrial revolution. And private equity giants investments like Blackstone's private equity investments are being bench marked against the S&P 500. And according to various sources the average private equity portfolio has been beating the S&P 500 for the last 15 years.

What is more, artificial intelligence, AI provides for operational average and when this is taken atop on the financially leveraged nature of private equity which in general uses 30 % equity and leverages that with 70 % raised debt on average these two leverage factors provide for opportunity to magnify returns several times and bring about a boon for Blackstone's private equity investments.

In addition, investors' high expected return requirements force Blackstone to seek out high yielding private equity investments like artificial intelligence, AI. Here it must be said, that Blackstone is a prestigious, huge firm with extensive resources, which help it in providing management expertise to the AI technology firms it invests its private equity finds into.

In short, the mid-term future of Blackstone's investment portfolio is tied to artificial intelligence, AI, according to Wolfteam Ltd.'s projections and estimates. As the US economy, for that matter.

CVC and AI

CVC Capital Partners PLC, or CVC one of the largest European and global private equity, real estate and private credit asset management firms can reach 144 billion USDs of market capitalization if artificial intelligence, AI lives up to the current forecasts of Wall Street research analysts, investors and Silicon Valley technologists and investors, according to Wolfteam Ltd.'s projections and estimates.

CVC, along with the other leading private equity companies Blackstone, KKR, Apollo, Carlyle, Ares, etc. invests a large part of its raised funds in artificial intelligence, AI related AI data centers and related AI technology companies.

In addition, CVC is very profitable, posting net profit margin of 30 % + in the last four reported quarters.

Private equity in its essence is a leveraged equity investment with borrowed debt. AI and technology is an operationally leveraged investment. All this makers for a magnified effect of profits if private equity investments turn out to be profitable. And profitability begets profitability.

So, in short if AI changes our world as profoundly as Wall Street research analysts, investors and Silicon Valley technologists and investors currently forecast, this would make up for very profitable business for CVC. 

AI technology deals for CVC will increase in count, as in 2021 was evident in the last technology boom, AI deals will beget deals not only for CVC, but for Blackstone, KKR, Apollo, Carlyle, Ares, etc. And CVC's profitability will drive tens of billions of USD in market capitalization value for CVC, according to Wolfteam Ltd.'s projections and estimates.

However, if the current overly optimistic forecasts for AI don't turn out to be correct, US and global stock markets could fall more that 52 %, and CVC, being a leveraged investment in nature could fall even more. 

 

How To Value Private Equity Firms' Investments In AI?

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc., the leading private equity, real estate and private credit asset management firms are investing more than 32 % of their new funds' assets in artificial intelligence, AI data centers companies, AI technology companies shares and loans to AI technology companies, according to Wolfteam Ltd.'s estimates.

Private equity firms tend to value firms on Earning Before Interest Taxes and Depreciation, EBITDA multiples. Wolfteam Ltd.'s corporate opinion is in agreement with the late great investor Charlie Munger that EBITDA is not a very good approximation for profitability. Especially, given the fact that data centers are depreciated on a 20 year time schedule by the hyperscalers Amazon, Microsoft, Alphabet, Meta and other technology firms. 

A much better measure would be the common Price/Earnings ratio. If artificial intelligence, AI's companies Price/Earnings ratio exceeds 55, this could be deemed a bubble, according to Wolfteam Ltd.'s projections and estimates.

A Price/Earnings ratio of 55 for an AI technology company would incorporate 20 %  yearly revenue growth, with net profit margins exceeding 17 % per year and US GDP growth of 5.7 % per year for the next 15 years. Which is simply a low probability assumption, according to Wolfteam Ltd.'s estimates.

At What Level Would The AI Boom Be Deemed A Bubble?

 

If the trailing Price/Earnings ratio on average for all the companies in the Nasdaq Composite surpasses 55, the artificial intelligence, AI technology boom can start showing signs of a bubble, according to Wolfteam Ltd.'s projections and estimates.

Currently the Nasdaq Composite Price/Earnings ratio is 27.72.

If the Nasdaq Composite Price/Earnings ratio exceeds 55 then the embedded growth expectations would require something like 5-6 % US annual GDP growth for the next 20 years, the largest public technology companies earnings growing by 15 % for 20 years and their net profit margin being above 22 % for the next 20 years to substantiate a Nasdaq Composite Price/Earnings ratio of 55, according to Wolfteam Ltd.'s projections and estimates. 

What Could Stop The Investments In AI Data Centers?

 

Microsoft, Amazon, Alphabet and Meta are planning to invest more than 100 billion USDs a quarter in artificial intelligence, AI data centers and the accompanying infrastructure in the next 3 years, according to public data and statements.

Currently, the Large Language Models(LLMs) powering the leading chat bots ChatGPT, Gemini and LLAMA are requiring huge amounts of computing power. If suddenly, chat bots start requiring much less energy to produce computing answers, this could decrease suddenly the investments in AI data centers by more than 80 % from current levels, according to Wolfteam Ltd.'s projections and estimates.

 If chat bots become more efficient or Large Language Models' shift from model training to inference, that is AI models start to use their own knowledge to make decisions, instead of relying on training, these both developments could reduce the huge demand for data centers.

Such an even was DeepSeek, the Chinese chat bot LLM which produced answers much more efficiently than the current chat bot LLMs.

For now, however with the current structure of LLMs, the need for computing power is bound to continue to grow and thus drive hundreds of billions of USDs investments a year in AI infrastructure.

One way, the system could fall apart is if the companies building out the AI infrastructure become too leveraged or indebted and crumble under their own debt burden. For now, such a scenario seems 3-5 years distant, according to Wolfteam Ltd.'s projections and estimates. 

 

Private Equity Firms Control 700 Billion USD In Life Insurance Assets

 

The largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. now control 700 billion USDs in life insurance assets. The Wall Street take over of large part of the life insurance business, makes life insurance assets interwoven in the global financial markets fabric.

Life insurance companies in search of higher yielding assets often invest not a negligible part of their portfolios in Collateralized Loan Obligations, CLOs the underlying loans of which have been disbursed to higher risk borrowers in technology and other sectors often commanding interest rates of more than 10 %, according to Wolfteam Ltd.'s projections and estimates.

Many of these CLOs are also bought by the private equity arms of Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc., which also on the other side disburse high yielding loans to risky borrowers in technology and other sectors thus commanding high interest rates of more than 10 %.

This kind of investments benefit the economy by supporting the technology companies which develop the AI infrastructure and thus drive the US GDP growth lately. The last figures show that large percentile of the US GDP growth is due to artificial intelligence, AI related investments.

On the other hand, however insurance being interwoven in the fabric of the economy means problems in one corner of the market or company could quickly spread and bring about a worldwide recession.

For now, however  the largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. investments seem to be paying off by yielding high rates of return, which are plowed back to the pension funds and endowments which provide large part of the privater equity firms' assets under management.

 

What Could Stop The AI Rally?

 

The artificial intelligence, AI rally could stop if the hyperscalers Amazon, Alphabet, Microsoft, Meta and other large technology companies lie NVIDIA, Oracle start depreciating on a faster scale their investments in AI infrastructure or data centers, according to Wolfteam Ltd.'s projections and estimates.

As far as there is public information, Amazon, Alphabet, Microsoft, Meta, NVIDIA and Oracle are depreciating their artificial intelligence, AI data centers assets on a 20 year time scales.

If a company like NVIDIA and Alphabet makes a jump in the development of Graphical Processing Units and Computer Processing Units chips used for AI processing, this could cause the AI chips replacement cycle to fall to 5 years. This quickly render the AI data centers built by Amazon, Alphabet, Microsoft, Meta obsolete in several years instead of the current twenty years. Amazon, Alphabet, Microsoft, Meta together currently invest more than 100 billion USDs in AI data centers build out per quarter. If these data centers investments become quickly obsolete Amazon, Alphabet, Microsoft, Meta could lose in excess of 300 billion USDs per year.

Amazon, Alphabet, Microsoft, Meta are highly profitable each making 60 billion USDs or more in net profit per year. But if Amazon, Alphabet, Microsoft, Meta via AI data center deprecation start realizing more than 300 billion USDs in losses per year, this could make their market capitalization fall by more than 55 %. Such a development could drag the whole global stock market with the Nasdaq Composite falling more than 62 % from its current levels, the S&P 500 could fall more than 44 % and the Dow Jones Industrial Average could fall more than 38 % from their current levels, according to Wolfteam Ltd.'s projections and estimates.

The Chip Competition

 

There is news that Meta, Facebook's is in discussion to use some of the AI chips Alphabet, Google's owner is developing.

AMD and NVIDIA's stocks fell on the news. 

NVIDIA holds circa 95 % market share, 2 % NVIDIA and 3 % for the rest of Graphical Processing Units and Computer Processing Units for AI data centers.

There have long been reports that Alphabet is developing its own, custom AI chips. 

So the news that Meta made a multi billion USD AI chips order from Alphabet heats up the AI chips competition and could accrue trillions of USDs of future value on Alphabet if the company has created successful and well working AI chips, according to Wolfteam Ltd.'s projections and estimates.

 

Private Credit And AI

 

The recent bankruptcies of First Brands and Tricolor shook the circa 3 trillion USDs in assets private credit market, wherein the biggest players are the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. which invest in private equity, real estate and private credit.

Much of the investments from the last 10 years of the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. go in AI and private credit makes up for about 20 % to 30 % of their total investments. So the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. have heavily invested into lending via private credit to AI technology companies. Since much of the lending is via collateralization via Collateralized Loan Obligations, CLOs, Collateralized Debt Obligations, CDOs there is inherent leverage in those investments, which could magnify losses for the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc.

Some of the loans and junior tranches of CLOs, CDOs have disbursed loans to technology companies with 10 %, 12 % or even upward of 15 % interests. Yes, many of these junior tranches have been sold to other institutional investors, but the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. still end up holding much of the CLOs, CDOs in their assets under management and some even on their balance sheets.

So, if there is bust, following the current boom in artificial intelligence, AI, the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. market capitalization could sink more than 35 % from the current stock market lagging values due to their exposure to private credit, according to Wolfteam Ltd.'s projections and estimates. 

If, however, the AI boom continues,  Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. could end up outperforming the market again, according to Wolfteam Ltd.'s projections and estimates.

How High Can Amazon's Market Capitalization Go In An AI Positive Case?

 

If the overly optimistic forecasts of Wall Street research analysts, investors and Silicon Valley technologists and investors for artificial intelligence, AI come to fruition, Amazon's market capitalization could reach 10.5 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

The premise for such a forecast is that Amazon's revenue reaches 1.1 trillion USDs and its net profit reaches 90 billion USDs, in Wolfteam Ltd.'s view.

Amazon is the leader in cloud computing with 34 % market share. The global cloud computing market size was estimated at USD 752.44 billion in 2024 and is projected to reach USD 2,390.18 billion by 2030, growing at a CAGR of 20.4% from 2025 to 2030. 

Amazon is also the leader in ecommerce. The global ecommerce market is expected to total $4.8 trillion in 2025.  

Cloud computing ensures leadership for Amazon also in the artificial intelligence, AI data center build out race. Amazon's Q chat bot is not as popular as OpenAI's ChatGPT, Alphabet's Gemini or xAI's Grok, but much of the world's computing goes via Amazon's servers.

If AI changes the world profoundly, Amazon will most likely lead the change and its market capitalization will rise a lot, if artificial intelligence makes us all multiple fold more productive.

There is the risk that artificial intelligence, AI's boom could turn into bust, much like the Dot Com boom and bust during which Amazon's market capitalization fell circa 90 % from peak to trough. 

What Could Derail The AI Rally?

Despite the recent circa 7 % Nasdaq Composite fall, the AI boom and following stock market rally seem to be in full swing.

Several events could stop the AI boom in its tracks, which could be defined by the Dow Jones Industrial Average, Standard and Poor's 500 and Nasdaq Composite and other major global stock market indices falling more than 40 % from their recent peaks, according to Wolfteam Ltd.'s projections and estimates:

 1) Policy error by the Federal Reserve, which could be defined as raising the target Federal Funds Rate and thus the interest rate level of the US economy by more than 2.5 % in the next 2 calendar years

2) Recently cracks appeared in the private credit market where several multi billion loans to firms like First Brands and Renovo are trading at steep discounts. Since there is much securitization in private credit and many of the loans disbursed are to technology firms, more bankruptcies could cause broader financial trouble. Some of the loans made to borrowers in the private credit market have paid out interest rates of  up to 20 % to 30 %, which partially explains the ongoing for several years now private credit boom

3) Sudden reset of investor expectations for the now apparently bright future of AI. This could be caused by faster depreciation tables on the current Graphical Processing Units chips used in AI data centers

4) Sudden and large rise in the price of oil, which could trigger galloping inflation

5) Sudden technological breakthrough akin to the Chinese DeepSeek, which would reset downwards by multiple fold investors' expectation of the needed future  billions, if not trillions of USDs spend on computing power to build out AI data centers

For now, however the wall of money looking for higher return in AI related technology companies seems bound to drive the AI rally further, according to Wolfteam Ltd.'s projections and estimates. 

 

How Deep Will The Current AI Correction Be?

 

The Nasdaq Composite is down 7.57 % from its recent peak on 29th October 2025 in what could be called an AI correction.

NVIDIA, the technology stock leading the AI revolution is down 15.7 % in the same period.

The draw down in AI technology stocks is driven by the current huge spending on AI data centers build out, the probable future profitability of the largest technology companies, the expected policy of the Federal Reserve, the current valuations of the leading technology companies, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla.

The Nasdaq Composite fell circa 35 % and NVIDIA fell circa 65 % in the 2021-2022 market rout which again focused on technology.

This time around the Nasdaq Composite could fall around 21 % from its 29 th October peak and NVIDIA's stock price could fall 40 % from its recent peak dragging along Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla, according to Wolfteam Ltd.'s projections and estimates.

The Nasdaq Composite will swiftly recover along with the rest of the market, though, in Wolfteam Ltd.'s view.

The current promise of AI driven to a large extent by the overly optimistic forecasts of Wall Street research analysts investors and Silicon Valley's technologists and investors is simply too great and will drive the stock market for years. AI could turn out to be a bubble, but the subsequent bust could create new world improving companies akin to Amazon, Alphabet, Google's owner and Meta, Facebook's owner which were created in the aftermath of the internet Dot Com boom and 77 % fall of the Nasdaq Composite bust.

How High Can Alphabet, Google Owner's Market Capitalization Go In An AI Positive Case?

 

If the current overly optimistic forecasts of Wall Street research analysts, investors and Silicon Valley technologists, investors for artificial intelligence, AI come true and AI ends up changing our world by improving greatly, multiple times our productivity Alphabet, Google owner's market capitalization could climb to 14.7 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

Alphabet's current market capitalization is 3.61 trillion USDs.  

Gemini, Alphabet's Large Language Model has 600 million  monthly active users and it is second only to OpenAI's ChatGPT Large Language Model with its 800 million monthly active users.

Large Language Models like Gemini and ChatGPT are essentially enhanced, improved search engines, for the moment at least. A Large Language Model needs data to train itself on and Alphabet, via its property search engine Google arguably has the most powerful and encompassing data base in the world. So Gemini potentially could end up to be the best trained Large Language Model. Which will benefit extremely Alphabet, Google's owner.

Because it is clear already that Large Language Models like ChatGPT, Gemini, xAI's Grok, Meta's LLAMA tend to monopolize the interest much like Yahoo, Google and Facebook did in their time.

So, if artificial intelligence, AI lives up to the current forecasts, it would not be surprising if Alphabet, Google's owner ends up with 14.7 trillion USD in market capitalization, according to Wolfteam Ltd.'s projections and estimates.

Meta and Microsoft, as the main shareholder in OpenAI could also end up being worth trillions of USDs more than their current market capitalization. xAI could also end up being worth more than a trillion USDs in value, according to Wolfteam Ltd.'s projections and estimates.

 

How High Can Apollo's Market Capitalization Go In An AI Positive Case?

Apollo Global Management, the leading private equity, real estate and private credit asset management firm could reach 450 billion USDs in market capitalization, if artificial intelligence, AI lives up to the current forecasts of many Wall Street research analysts, investors and Silicon Valley technologists and investors, according to Wolfteam Ltd.'s projections and estimates.

Apollo has invested large share of its private equity, real estate and private credit assets under management in AI technology companies, AI data centers and online merchandise infrastructure. Since only small part of Apollo's company investments are via equity and the much larger part is in debt, Apollo's AI investments are leveraged in nature. Add to this AI technology companies' operational leverage and if AI changes the world as profoundly as many Wall Street research analysts, investors and Silicon Valley technologists and investors think, Apollo's investments in AI gains will be multiplied and Apollo's value will increase multiple fold.

However, if the AI boom turns into a bust, Apollo's losses could be magnified as well.

In the short-term, it seems the AI boom will continue. But it has to lead to AI technology company profitability, if it is to have a lasting effect on the world, in Wolfteam Ltd.'s view.

 

How High Can Carlyle's Market Capitalization Go In An AI Positive Case?

 

Carlyle, the private equity, real estate and private credit asset management firm could reach 102 billion USDs in market capitalization if artificial intelligence, AI lives up to the current forecasts of Wall Street research analysts, investors and Silicon Valley investors and technologists, according to Wolfteam Ltd.'s projections and estimates.

This compares with Carlyle's current market capitalization of 19.28 billion USDs.

Carlyle, along with the other leading  private equity, real estate and private credit asset management firms invests heavily tens of billions of USDs in technology companies, artificial intelligence infrastructure like data centers and online merchandising delivery centers giving it leveraged exposure to artificial intelligence, AI since Carlyle finances only a portion with equity, most with borrowed debt via loans or bonds.

Carlyle's stock price has under performed lately and if artificial intelligence, AI continues booming, most probably Carlyle's market capitalization will start growing due to the leveraged nature of Carlyle's investments in AI. Carlyle is a leader in private credit and currently interest rates on loans to AI technology companies often exceed 12 % or even 15 % per year. Which turns private credit in a very profitable machine for Carlyle.

 

What If AI Turns Out To Be A Bubble?

 

If the current artificial intelligence, AI boom proves to be a bubble, the Nasdaq Composite could fall more than 81 % from its current level, according to Wolfteam Ltd.'s projections and estimates.

Currently, according to many metrics the Nasdaq Composite current level is almost at the level of the Nasdaq Composite at the height of the Dot Com bubble. From peek to trough at the 2000 Dot Com bubble and subsequent bust the Nasdaq Composite fell 77 %.

This time around, if the AI bubble bursts, the fall of the Nasdaq Composite could be a little bit worst, in Wolfteam Ltd.'s view.

It is true that the leading technology companies with more than 1.35 trillion USDs in market capitalization each, like NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla are extremely profitable, partially excluding Tesla due to its relatively low profitability. But Cisco and Microsoft were hugely profitable during the Dot Com boom also. In 2000 it turned out that that level of profitability was simply unsustainable. The leading technology companies in 2000 invested a lot in fiber optic infrastructure and the world needed decades to fully utilize that internet infrastructure.

It turned out that the technology giants in the 2000 boom over invested in internet technology infrastructure in the short-term, which hit their profits. But in the long-term, 10-15 years that over investment turned out good for society and the technology community.

Similarly now the hyperscalers Amazon, Alphabet, Microsoft and Meta are spending 100s of billions of USD per year in artificial intelligence, AI infrastructure. It may well turn out that in the short-run  hyperscalers Amazon, Alphabet, Microsoft and Meta are over investing, but in 10-15 years the AI infrastructure they are now building may be fully utilized.

In the worst case scenario, the graphical processing unites chips mainly NVIDIA manufactures in the current AI data centers could turn out to be obsolete in 5 years, replaced by newer, with far better technology GPU chips. Which will deprecate the value of the current AI data centers and hit the  hyperscalers Amazon, Alphabet, Microsoft and Meta with hundreds of billions USDs of losses.

Such a scenario at the moment has a probability of around 25 %, according to Wolfteam Ltd.'s projections and estimates.

If the AI dreams of robots everywhere, billions of robots serving humanity and AI data changing our lives, how produce and consume leisure come to fruition in the most optimistic scenarios of Wall Street research analysts, investors and Silicon Valley investors and technologists, NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla could prove grossly undervalued.

 

How High Can KKR's Market Capitalization Go On AI?

KKR, the leading private, real estate and private credit alternative asset manager could climb to 320 billion USDs in market capitalization value, if artificial intelligence, AI lives up to the current forecasts of many Wall Street research analysts, investors and Silicon Valley technologists, because KKR is a leading investor in AI data centers, online merchandise trading infrastructure and outright investments in AI technology growth and mature companies, according to Wolfteam Ltd.'s projections and estimates.

That compares to KKR's current 108.09 billion marker capitalization. 

KKR's revenue could climb from the current 16 billion USD on average for the last five years to 43 billion USDs on average on larger and bigger in numbers yearly deals in artificial intelligence, where much of the leading private, real estate and private credit alternative asset manager investments go currently via investments in AI data centers, online merchandise trading infrastructure and outright investments in AI technology growth and mature companies, according to Wolfteam Ltd.'s projections and estimates.

KKR could benefit from both its current exposure to AI and future increase of the value and number of deals involving artificial intelligence, AI companies.

AI's current boom could turn into a bust of course, but for the time being self perpetuating expectations and the higher revenues and profits of AI firms drive the AI boom and the flourishing of AI technology companies.