As you think about the next steps, the next stage for private markets, what do you think as you look forward? Is it entering its most important stage, its most challenging stage? How do you think about the next 10 years?

I definitely think we're at a very exciting point in terms of the growth trajectory.

When I think about challenges, if you went back to the financial crisis, back then we were only engaged in the highest return strategies, often with more leverage, private equity, real estate, private equity.

And we had this market shock, economic shock, That was definitely a vulnerable time because we had a more narrow, more fragile business.

The last four years, seeing this interest rate shock where cost of capital went up a lot, that posed challenges.

But what's been happening, particularly over the last 10 plus years, is a diversification of what the business is.

So what was fairly narrow in these high-risk, high-return strategies, which we continue to do and are very proud of the results, serving a relatively small number of customers, mostly pension funds, endowments, sovereign wealth funds, we've seen this big growth in what the business is and what it can do.

When you think about the benefits of private markets from a liquidity perspective, holding as you get that kind of challenges around liquidity.

... we're gonna have.

Exactly.

Look, it, it, again, it's a little bit organic.

I, I think the key thing, sticking with organic, is you've gotta create the right environment where you're encouraging people to look for these thematic tailwinds, and you're encouraging people to share these ideas.

Because if you think about investing as pattern recognition, if you can s- connect those dots before other people, then you have a chance to produce an outsized return.

So, you know, you mentioned logistics.

We started buying after the financial crisis warehouses, and we bought them because they were inexpensive and so forth.

You know, when s- you're putting so much capital to work on one of your convictions, you know, how do you ensure that conviction doesn't harden into consensus?

Can you give us a little bit more of like an insight of like, what all is because I think when you say TFO course is kind of very you know broad I mean right right exactly so if you can kind of tell us a little bit more about like what what is it about the class that really just makes it so relevant in the industry right now and what kind of things are they going over

Yeah, I think, again, each Clay's class and Jack's class by themselves are outstanding classes.

And they both kind of focus on the apprehension of fleeing suspects.

So how in law enforcement do we successfully capture and apprehend people that are trying to get away from us? That's the premise of both courses.

Jack and Clay come at it from a slightly different angle, but together their message is so outstanding.

It's really good.

So it's not just for the TFO.

It's a great event.

Mm-hmm.

When an airline goes to buy a plane, they look at the credit of that company, but also the plane.

I think historically here, the limitation has been investors have said, "Oh, I only want so much exposure to this hyperscaler or maybe to this foundational model company." I think when people recognize how powerful and valuable this compute is, no matter who's using it, and in Jensen's case, they've got very fungible, flexible capabilities with their GPUs and the CUDA software.

So what I think is markets are gonna recognize the opportunity.

If the scale gets very, very big, which it is, pricing could widen out.

Mm-hmm.

You know, there's all this negativity around AI, and yet we're gonna have a blue collar job boom coming from this.

We're gonna see advances in healthcare that people cannot imagine.

I asked the company's president and COO, John Gray, how much of that jump was powered by AI.

Well, it definitely was a heck of a quarter, Danny, and 26% up in earnings on top of 25% last quarter.

And it was definitely powered by that strategic decision we made to lean into AI and the AI ecosystem.

It really started for us back in 2021 when we bought QTS, this big data center business, and it gave us a front row seat in terms of what's happening around AI.

And we made a strategic decision, hey, we should lean in here, not just with data centers, but with neo-clouds, large language models, electrical equipment, energy.

And that decision is paying off and it's delivering for our clients, which is the most important thing.

And what's also very exciting is we're not done here.

If those hyperscalers do start to pull back because of the market pushback, how does that impact Blackstone's investments in deployment?

Yeah

... because you have to be clear thinking.

Because sometimes you may have made a really bad decision.

In the case of Hilton, we actually had invested in a great company.

Our timing was terrible.

But if we had the staying power to get to the other side, we thought we could make it.

So stay calm.

[laughs]