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Although President Donald Trump’s tariffs have posed a threat to the artificial intelligence boom, Jonathan Gray of Blackstone thinks there is more gas in the tank for data center usage demand. “I think this trend is powerful. I think it will continue,” the firm’s president and chief operating officer told CNBC’s ” Squawk on the Street ” on Monday. While he added that chip export restrictions are “slowing things down” a bit and that U.S.-controlled data centers would be a solution that could limit security concerns around that area, he continued by saying that “overall, we still see a ton of demand.” After coming under significant pressure in the wake of Trump’s “reciprocal” tariffs announcement in early April, Big Tech stocks have since rebounded. The Roundhill Magnificent Seven ETF (MAGS) has climbed back above its April 2 closing price due in part to the latest quarterly results from Meta Platforms and Microsoft last week. Those reports renewed confidence among investors that the AI trade was still intact despite concerns of a U.S. economic downturn and uncertainty around global trade barriers. “I think there’s a bit of a danger that it’s almost like there’s this wall in front of us and … we’ve forgotten what’s off in the distance, which is this powerful revolution in technology,” he said. “[Meta CEO] Mark Zuckerberg said last week that what’s happening in AI is staggering, and we share that view.” While Gray stressed that AI is still “in the early days,” he sees “significant increases” in the space year by year. He also believes the electricity needs of this data center growth will be met, though considering all sources of power such as renewables and natural gas is imperative. “It’s a global issue. I mean, everywhere there are constraints,” he said about electricity demand. “Big companies are recognizing this, and I think the investments will come, and importantly, the government recognizes it, and so it is the gating factor on this sort of technological revolution we’re on.” In addition to being bullish on electricity and power, he is also optimistic about commercial real estate, saying that a massive pullback in new starts over the past three years “is laying the framework, the groundwork for a big recovery in commercial real estate.” That even includes the office sector, which has suffered major headwinds since the Covid-19 pandemic.
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