MW AI is gobbling up power and money - and sidelining this big issue, Blackstone and BlackRock CEO say

By Barbara Kollmeyer

Blackstone's Schwarzman says the U.S. has a power problem

CEO of Blackstone Stephen Schwarzman weighed in on AI investments and a major problem facing the U.S. at a Riyadh conference on Tuesday.

Crossing several time zones this morning, the stage at a Riyadh, Saudi Arabia conference was lit up with some of the biggest names in finance.

The annual Future Investment Initiative in Riyadh, Saudi Arabia that kicked off Tuesday gathered BlackRock CEO Larry Fink, Goldman Sachs CEO David Solomon, and Blackstone founder Stephen Schwarzman to discuss AI and some hot investment topics.

Schwarzman offered his take on where to invest right now, which came with a warning. "Right now, the most interesting area is in the data-center AI complex with particular emphasis on power. Power is what's going to be in short supply," said Schwarzman, as he flagged a major problem that is top of mind for one of the world's biggest alternative investment managers.

He said the U.S. is getting 80% to 85% of all investments, yet its electric grid has been stagnant for 20 years.

"Now with the advent of all the data centers, you're going to have growth of at least 4%, maybe 5% going forward, and the reserve to protect the adequacy of electricity in the U.S. is mandated around 15%. But if you're only growing at 4% a year, and you only have 15% surplus, something not so good is going to happen very quickly," he said.

"The need to solve this problem is really acute, and for those of us who have been involved in this, Blackstone - we're the largest developer and owner of data centers in the world - we can see this all coming. There just simply isn't enough money for the scale of this problem without very high returns going along with it," he said.

Onto Cristiano Amon, CEO of Qualcomm $(QCOM)$, which announced two chips for the multibillion-dollar data-center build-out, sending shares soaring.

Amon said they see AI as a new form of software that will "change every computer we have," along with how we use our phones, personal computers, cars and industrial machines. "It's going to create an incredible opportunity and transformation in all of those industries," he said.

He offered his idea of a smart AI investment right now. "I will pay attention to the companies that are becoming really connected to the consumers. Understanding human intentions is very important and valuable when now the computers understand what we see what we say what we write is a change in the human compute interface. Companies that are embracing the new agentic-type experiences for the enterprise," Amon said.

AI also cropped up in a discussion on the dollar. BlackRock's Fink noted that while the start of the year saw a modest transformation out of the dollar and into Europe, the past few months has seen lots of that money coming back.

Fink said there's still a "deep belief in opportunity in the U.S.," which has largely to do with AI investments and spending on that technology that he said hasn't been seen as much in other countries.

"Most global investors have a very large overweight in the U.S. and I think that's going to be the place to have your overweight for at least the next 18 months," said Fink.

He also said AI is crowding out the discussion that should be happening around digitization and tokenization of currencies. "We're not talking about how quickly we're going to tokenize every financial asset, and the opportunity we're going to have to have a digital wallet and moving ETFs and other things though a digital wallet. I think that's going to happen worldwide very rapidly, and I think most countries are ill-prepared for that and underappreciate how technology is changing that, not unlike how technology is changing AI. It will be changing the technology around the plumbing of finance."

Expressing confidence in the dollar, Goldman's Solomon said the U.S. remains the best place for technological innovation that's central to growth and has the best capital markets in the world. He also described cryptocurrencies and gold as "assets of fear."

"You own these assets because you're frightened of the debasement of your assets, you're worried about your financial security, you're worried about your physical security. Between crypto assets and gold, there's a strong belief that that is a good hedge against optimism. "

The markets

U.S. stock futures (ES00) (YM00) (NQ00) are struggling for traction, with the 10-year Treasury yield BX:TMUBMUSD10Y hovering under 4%. Gold (GC00), silver (SI00) and bitcoin (BTCUSD) are lower.

   Key asset performance                                                Last       5d      1m      YTD      1y 
   S&P 500                                                              6875.16    2.08%   3.21%   16.89%   18.06% 
   Nasdaq Composite                                                     23,637.46  2.81%   4.63%   22.41%   27.31% 
   10-year Treasury                                                     3.983      0.90    -16.90  -59.30   -27.60 
   Gold                                                                 3977.5     -9.07%  2.97%   50.70%   44.38% 
   Oil                                                                  61.19      7.48%   -3.15%  -14.86%  -10.03% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

UPS stock $(UPS)$ is soaring after results.

Amazon stock (AMZN) is rising after announcing 14,000 corporate jobs will go, and more could be cut, one day after reports 30,000 jobs were on the line.

Cameco $(CCJ)$, Brookfield Asset Management (BAM) and Westinghouse Electric announced a $80 billion partnership with the U.S. government to build nuclear reactors across the U.S.

Nvidia (NVDA) CEO Jensen Huang will speak at the GPU Technology Conference in Washington, D.C. at 12 noon Eastern.

The S&P Case-Shiller home price index is due at 9 a.m. and the University of Michigan consumer confidence index at 10 a.m.

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The chart

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Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

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   TSLA    Tesla 
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   BYND    Beyond Meat 
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   TSM     Taiwan Semiconductor Manufacturing 
   AMZN    Amazon 
   PLTR    Palantir Technologies 
   SOFI    Sofi 
   AAPL    Apple 

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-Barbara Kollmeyer

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October 28, 2025 07:01 ET (11:01 GMT)

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