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**Blackstone extended its TXNM Energy acquisition deadline to May 2027 as New Mexico regulators paused their review.** Blackstone Infrastructure pushed the termination date on its TXNM Energy acquisition to May 31, 2027, extending the timeline by 10 months as the deal awaits clearance from New Mexico and nuclear regulators. "We remain committed to our proposed partnership with Blackstone Infrastructure because it is critical to TXNM Energy's long-term ability to provide clean, affordable and reliable power to the customers we serve," said Don Tarry, president and chief executive officer of TXNM Energy. The transaction has secured approvals from the Public Utility Commission of Texas, the Federal Energy Regulatory Commission and the Federal Communications Commission, and cleared the Hart-Scott-Rodino antitrust waiting period. TXNM shareholders overwhelmingly approved the deal in August 2025. Still pending are sign-offs from the Nuclear Regulatory Commission and the New Mexico Public Regulation Commission, whose procedural schedule remains paused pending a compliance report tied to a 2025 stock transaction between the two companies. The delay shows the regulatory friction facing infrastructure M&A in the US utility sector. TXNM, which serves more than 800,000 customers across New Mexico and Texas, has also taken out a $400 million term loan to unwind the voided 2025 stock transaction, with plans to issue common stock to repay it. The joint applicants expect to file a compliance report by the end of July 2026, with a deal closing estimated in the first half of 2027. "Blackstone Infrastructure's extension of our merger agreement is a sign of our commitment to continue to work collaboratively with stakeholders as we demonstrate the significant benefits of the proposed merger," said Sean Klimczak, global head of Blackstone Infrastructure. The extended timeline gives both parties room to navigate the remaining regulatory hurdles. TXNM plans to issue common stock to repay the $400 million term loan taken out to unwind the voided 2025 stock transaction, a step the NMPRC had required before resuming its review. If the compliance report is filed by the end of July 2026 as planned, the deal could close in the first half of 2027 — roughly two years after the original announcement. This article is for informational purposes only and does not constitute investment advice.
Blackstone, BlackRock and Apollo have triggered redemption restrictions across their private credit funds as defaults rise and investors rush for exits, exposing a structural liquidity mismatch in the $3 trillion market that regulators have warned could ripple through the banking system and AI financing. "The global credit default cycle has begun and losses will likely exceed current market expectations," PIMCO said in its latest outlook, marking one of the most explicit warnings from a major fixed-income manager about the $2.5 trillion to $3 trillion private credit industry. Redemption requests at non-traded business development companies tracked by Fitch Ratings reached an average 10.3% of shares outstanding in the second quarter, up from 9.7% in the prior period and more than double the typical 5% quarterly repurchase limit. BlackRock's private credit fund honored less than 40% of redemption requests, while Cox Capital Partners launched tender offers for Apollo fund shares at 70 cents on the dollar and HPS Investment Partners shares at 75 cents — discounts of 15% to 30% to stated net asset values. Partners Group, the Swiss asset manager, capped redemptions from an $8.6 billion private equity fund last month after clients pulled $3.8 billion in the first half. The crisis marks the first real credit cycle test for an industry that grew 50% to 75% between 2024 and 2025, fueled by pension funds, insurers and high-net-worth investors chasing yields of 3% to 4% above public bonds. Unlike publicly traded debt, private credit loans are held to maturity and valued internally by fund managers, meaning credit deterioration often does not appear in net asset values until a default or forced sale occurs. The gap between stated NAV and what investors can actually get in the secondary market — 15% to 30% for some Apollo and Ares funds — suggests the industry is entering a price-discovery phase that could trigger further write-downs. ## Bank exposure and the AI financing link The contagion risk extends well beyond fund investors. Banks hold an estimated $2.3 trillion in contingent liquidity exposure to non-depository financial institutions, including subscription lines and NAV financing facilities extended to private credit funds. Euro zone banks alone have about 62.5 billion euros in direct private credit exposure, equal to 0.2% of their assets, while insurers hold 211 billion euros and pension funds 52 billion euros, according to European Central Bank data. The ECB warned in May that private credit's role in financing the AI boom poses a risk to the financial system, as second-round effects from a severe shock — including broader market selloffs and valuation losses — could be larger than direct losses. The AI financing channel is particularly vulnerable. Morgan Stanley estimated last year that AI data centers would require about $1.5 trillion in external financing, with as much as half coming from private credit markets. With fund liquidity freezing, that pipeline is now threatened. AI-related companies account for roughly 45% of S&P 500 market capitalization, meaning a slowdown in AI capital expenditure could spill over into equity valuations. The industry's fee structure compounds the pressure. Private credit funds charge 3% to 4% of net assets annually — far above the 0.03% for an S&P 500 index fund — creating a high-cost wrapper for assets that are increasingly difficult to exit. As redemptions mount and secondary market discounts widen, the gap between what funds say their assets are worth and what buyers will pay is becoming the central fault line in the $3 trillion market. This article is for informational purposes only and does not constitute investment advice.
**Frontier AI labs are betting that helping companies deploy their models is a bigger business than building them.** Anthropic and Blackstone have launched Ode, a $1.5 billion joint venture that embeds elite AI engineers inside enterprise customers, betting the next trillion-dollar category in artificial intelligence is implementation, not model development. "It's pretty easy to imagine this as a trillion-dollar company someday if we execute well," Chris Taylor, chief executive officer of Ode and co-founder of Fractional AI, the startup acquired to form the venture's foundation, said. Ode currently employs 100 engineers, over half of whom are former founders, and operates under a "Claude-first" principle while remaining open to rival models. The venture was conceived by Blackstone after the firm struggled to find effective AI implementation partners across its portfolio companies. Backers include Hellman & Friedman, Goldman Sachs, and other private equity firms that will funnel their own portfolio companies to Ode as potential customers. The launch follows OpenAI's own The Deployment Company, a recognition among frontier AI labs that winning enterprise customers requires more than superior models. If Ode and its backers are right, the next great AI race will be about who can successfully put models to work inside the world's largest companies — a market that could reshape the competitive dynamics between AI labs, consulting giants, and the enterprises themselves. **The Implementation Gap** Blackstone identified the gap after hiring both large consulting firms and small AI services boutiques to implement AI across its portfolio. One boutique, Fractional AI, stood out — and the joint venture acquired the startup shortly after Ode was announced in May. Fractional had ended an 11-month partnership with OpenAI when it was acquired. Ode's team is described as elite generalist software engineers — the "special forces" rather than an army of forward-deployed engineers, as one Blackstone executive put it. Eddie Siegel, Ode's chief technologist and a Fractional co-founder, said the venture's advantage is its ability to build custom solutions for business problems. "I think model selection matters, but it's not where the majority of calories are spent," Siegel said. "It's one ingredient in a system that has to be engineered." **Competition for Scarce Talent** Demand for such forward-deployed engineering teams far outstrips supply, according to people involved in the venture. Ode plans to scale internationally while maintaining its boutique positioning, running constant evaluations to measure the business impact of AI implementations. But the talent challenge is real. If becoming an elite applied AI engineer requires entrepreneurial experience, systems-first thinking, and enterprise product judgment, training enough people to meet demand is an open question. Ode will compete not only with OpenAI's The Deployment Company but also with consulting giants like Deloitte and Accenture, which have created their own forward-deployed engineering teams. Siegel said he is not worried about a dwindling pool of generalist engineers. "It has never been an easier time to become an entrepreneur," he said. "You learn so much by trying to own problems end-to-end." **Investment Angle** For investors, the creation of Ode shows a shift in where value accrues in the AI stack. While Nvidia has captured the majority of AI-related revenue through its data center GPUs — the company reported $26 billion in data center revenue in its most recent quarter — the implementation layer remains fragmented. Consulting firms like Accenture have invested heavily in AI practices, but no single player has established dominance. Ode's backers are betting that the implementation market could rival the model market in size. Anthropic itself has not disclosed revenue, but the $1.5 billion valuation of Ode — a services company with 100 engineers — suggests investors see significant upside. By comparison, OpenAI was valued at $300 billion in its most recent funding round, highlighting the disparity between model companies and the services firms that deploy them. This article is for informational purposes only and does not constitute investment advice.
US data-center builders and operators are working with bankers to sell majority equity stakes worth tens of billions of dollars this summer, capitalizing on surging demand for AI computing infrastructure. "There are not that many people who can write those checks," Ravi Purohit, co-head of infrastructure at Paul Weiss, said. Among the largest potential deals, Dallas-based DataBank could fetch as much as $25 billion in a majority stake sale, according to people familiar with the process. EdgeCore Digital Infrastructure, a Denver-based operator backed by Swiss investment firm Partners Group, asked potential buyers to submit offers last week. KKR's newly formed Helix Digital Infrastructure is among those evaluating assets, a person with direct knowledge said. Other firms working with bankers include Netrality Data Centers and Edged, with properties spanning from Phoenix to Atlanta. The wave of stake sales comes as data-center M&A hit about $50 billion in 2025, more than double the prior year, according to S&P Global Market Intelligence. Whether enough buyers exist to absorb multiple multibillion-dollar deals simultaneously remains an open question. **Rising costs drive consolidation** Shortages of electricians, plumbers, gas turbines and memory chips have driven construction costs higher. Nvidia Chief Executive Jensen Huang recently estimated that building a gigawatt of new computing power using his company's architecture could soon reach $80 billion to $100 billion. Some operators have been forced to seek deeper-pocketed backers to fund their next phase of expansion, according to several people working on the deals. Private-equity firms have increasingly added data-center operators to their portfolios. Blackstone took a roughly 49 percent stake in Rowan Digital Infrastructure in April and bought QTS for about $10 billion in 2021. Last year, a consortium led by BlackRock's Global Infrastructure Partners and MGX agreed to buy Aligned Data Centers for about $40 billion, the largest data-center deal ever. That acquisition is expected to close in the coming weeks, surpassing Blackstone's roughly $16 billion purchase of AirTrunk in 2024. **NIMBY resistance adds risk** Developers are increasingly running into fierce local opposition driven by residents' anxieties over rising utility bills, noise and AI services in general. In some cases, it has pushed developers to pause or walk away from projects, making data-center investments riskier than in the past. "The more they can demonstrate to buyers that they have a constructive relationship with these communities...that actually goes a long way," Purohit said, adding that companies looking to sell this summer will be scrutinized for how they plan to handle local opposition. Guaranteed access to electrical power is a major factor in deal valuations, bankers and investors involved in the sales say. Concerns around rising costs and delays might also drive some buyers to tie payments to completion of milestones. For investors, the wave of stake sales signals that data-center assets are entering a new phase of institutional ownership. Blackstone, BlackRock and KKR are placing large bets on AI infrastructure, while developers like DataBank and EdgeCore seek capital partners to fund expansions that no single firm can finance alone. The $25 billion DataBank deal, if completed, would serve as a benchmark for how the market values pure-play data-center operators in an era of $80 billion-plus build costs per gigawatt. This article is for informational purposes only and does not constitute investment advice.
Private credit is heading to 401(k) plans, opening a $14 trillion retirement market to alternative asset managers including Blackstone Inc., Apollo Global Management Inc. and KKR & Co. that stand to collect billions in new fee revenue. "Bringing private credit into defined-contribution plans is the next frontier for retailization of alternative assets," said Frank N. Newman, a former U.S. deputy secretary of the Treasury and current board member at several financial institutions. "The challenge is educating plan participants about liquidity risk in exchange for higher potential returns." Blackstone, the largest alternative asset manager with $1.3 trillion in assets under management, is particularly well-positioned. Its non-investment-grade credit strategies have returned 9.4% on an annualized basis through multiple credit cycles over the past 20 years, according to the firm. Institutional investors and insurance companies account for 75% of Blackstone's private credit business, providing a stable base as it expands into retail retirement accounts. The firm operates more than 90 investment strategies spanning investment-grade to non-investment-grade credit. Apollo Global Management, with roughly $1 trillion in AUM, brings a complementary structure through its retirement services arm Athene, which sells annuity products. The company has been working to increase transparency in private credit pricing and valuation — a move that could help build trust among 401(k) plan sponsors and their participants. KKR, the smallest of the three at about $760 billion in AUM, reported that its inflows doubled quarter over quarter in the first quarter of 2026, signaling strong investor demand despite media scrutiny of the private credit sector. KKR's insurance business, Global Atlantic, provides a similar foundation to Apollo's Athene model. Private credit funds invest in the equity and debt of non-traded businesses — companies that, for various reasons, do not seek funding in public capital markets. The asset class has historically been the domain of institutional investors and high-net-worth individuals due to its complexity and lack of liquidity. During recessions or periods of rising interest rates, some private credit investments can struggle to service interest payments, and troubled businesses may find no buyers for their securities. The expansion into 401(k) plans represents a structural shift for the retirement industry. The U.S. defined-contribution market holds roughly $14 trillion in assets, according to industry estimates, and even a modest allocation of 1% to 3% toward private credit would channel $140 billion to $420 billion into the asset class. For context, the last major expansion of retail access to alternatives — the 2020 regulatory change allowing closed-end interval funds — drew about $80 billion in inflows over three years, according to data from Morningstar. For investors who prefer not to hold private credit directly, the publicly traded shares of Blackstone, Apollo and KKR offer exposure to the fee income generated by this distribution channel expansion. Each firm earns management fees based on AUM and performance fees on returns above agreed thresholds, meaning growth in retail retirement allocations flows directly to their bottom lines. This article is for informational purposes only and does not constitute investment advice.
**Blackstone's QTS abandoned plans for an 800-acre data center campus in Virginia, the largest project cancellation in a region facing mounting community opposition.** QTS, a Blackstone-owned data center operator, terminated its planned Digital Gateway project in Prince William County, Virginia, and withdrew all associated filings, the company said Thursday. The decision removes a major supply pipeline from Northern Virginia's data center market, the world's largest by capacity, as developers grapple with power constraints and local resistance to new construction. "After years of planning and regulatory review, we have decided to terminate the Digital Gateway project and withdraw all associated filings," a QTS spokesperson said, declining to disclose the project's total investment. The 800-acre campus was among the largest proposed data center developments in the US. Prince William County supervisors had previously voted against rezoning approvals needed for the project, citing concerns over strain on the local power grid and water supply, according to people familiar with the matter. QTS withdrew its final appeal after the county's decision, sealing the project's fate. The pullback comes as demand for AI and cloud infrastructure continues to surge. The loss of Digital Gateway capacity could push developers to secondary markets such as Ohio, Texas, and Arizona, where power availability and permitting are less constrained. Power availability has replaced land as the primary bottleneck for new development, with grid interconnection lead times stretching to several years in many markets. For Blackstone, the cancellation is a setback for its infrastructure strategy. The firm acquired QTS in 2021 for $10 billion, betting on the secular growth of cloud and AI workloads. QTS operates more than 30 data centers across North America and Europe, and the Digital Gateway project was expected to be one of its largest single campuses. Developers including Amazon, Microsoft, and Google have committed tens of billions of dollars to new data center capacity, but project timelines remain uncertain because of regulatory hurdles and power constraints. Northern Virginia, which hosts the highest concentration of data centers globally, has become a flashpoint for community backlash over energy consumption and environmental impact. Dominion Energy, the region's utility provider, has previously warned that data center demand could require significant additional power generation capacity by the end of the decade. Blackstone shares were little changed on the news. The cancellation may benefit publicly traded data center REITs such as Equinix and Digital Realty, which could capture displaced demand in Northern Virginia, though neither company has commented on the project's termination. This article is for informational purposes only and does not constitute investment advice.
**Digital Realty is paying $3.5 billion to take control of three fully leased hyperscale data centers in the world's largest data center market.** Digital Realty agreed to acquire Blackstone's 64% stake in three Northern Virginia data centers for $3.5 billion, adding 288 megawatts of hyperscale capacity in the top US data center market. "This transaction reflects the next phase of that relationship, allowing us to increase our ownership in a portfolio of fully leased, high quality hyperscale assets," Greg Wright, chief investment officer at Digital Realty, said. The portfolio comprises two 96 MW facilities in Manassas and one 96 MW facility on the Digital Dulles campus in Sterling, all 100% leased to three investment-grade hyperscale customers with a blended AA- credit rating. Digital Realty paid $1.2 billion in cash and $2.3 billion in stock, representing a gross property value of $7.8 billion at an expected stabilized cap rate above 6.5%. Two of the data centers are expected to stabilize in the first half of 2027, with the third following in the first half of 2028. The deal deepens Digital Realty's exposure to Northern Virginia, which hosts more than a third of the world's internet traffic, as AI and cloud demand drive a construction boom. Blackstone, which will also sell $2.35 billion of Digital Realty shares through Morgan Stanley, retains joint venture positions with Digital Realty in Paris and Frankfurt. The transaction is expected to be accretive to Digital Realty's core funds from operations per share in both 2027 and 2028 as development completes and rents commence, according to Chief Financial Officer Matt Mercier. The 15-year leases carry 3.6% annual rent escalators, providing predictable revenue growth in an asset class where power constraints are making new supply increasingly difficult to bring online. **Consolidating the lead in a power-constrained market** The deal strengthens Digital Realty's position as the largest global data center provider, with more than 300 facilities across 55 metros in 30 countries. Blackstone, meanwhile, continues to monetize its data center investments after a rapid build-out phase. The firm's data center portfolio now exceeds $55 billion, including full ownership of QTS and CoreWeave, and it recently completed the $16.1 billion acquisition of Australian data center operator AirTrunk. A QTS affiliate also closed on nearly $500 million in land purchases in Bessemer, Alabama, for a hyperscale project, signaling that Blackstone is rotating capital rather than exiting the sector. **What the share sale means for investors** Digital Realty shares will absorb $2.35 billion of new supply as Blackstone sells its stake through an underwritten offering by Morgan Stanley. The company itself receives none of the proceeds — the shares are being sold by Blackstone alone. For investors, the question is whether the dilution from the share sale offsets the accretion from the asset purchase. The deal's 6.5% stabilized cap rate compares favorably with Digital Realty's cost of capital, and the AA- credit quality of the tenants reduces lease-up risk in a market where vacancy rates for new hyperscale supply remain near zero. This article is for informational purposes only and does not constitute investment advice.
More US CEOs crossed the $100 million pay threshold in 2025 than any year since 2021, with Elon Musk setting a $158 billion record. "Executives are increasingly driven by what peers are earning rather than long-term value creation," Warren Buffett wrote in his final Berkshire Hathaway shareholder letter. Shankh Mitra of Welltower received $821 million, one of the largest executive pay packages for a public-company CEO over the past decade. Dylan Field of Figma took home $864 million, while Kaz Nejatian of Opendoor Technologies received $741 million. S&P 500 median CEO compensation reached $17.9 million, with half of chiefs receiving raises of 9.8 percent or more. The surge in nine-figure pay packages comes as the CEO-to-worker pay ratio widened to 99-to-1 on a median basis, up from 92-to-1 in 2024. Tesla's ratio reached 2,522,203-to-1 against a median worker salary of $62,786. Nearly a dozen CEOs topped $200 million, including Hock Tan of Broadcom at $205 million and David Zaslav of Warner Bros. Discovery at $165 million. George Kurtz of CrowdStrike received $248 million. Stephen Schwarzman of Blackstone, David Solomon of Goldman Sachs and Nikesh Arora of Palo Alto Networks each received packages between $100 million and $126 million. Musk's $158 billion award was so large that C-Suite Comp removed him as a statistical outlier before calculating broader market trends. Excluding Musk, median CEO total compensation rose 13 percent year-over-year to $4.75 million, while the average climbed 26 percent to $8.96 million. Welltower awarded four executives packages valued at more than $100 million each, making it only the second company in a decade to have four nine-figure executives in a single year. The company said the awards replace bonuses and equity for a decade and are designed to align incentives with shareholders. Technology was the top-paying sector for CEOs, led by Field's $864 million package at Figma. Real estate ranked second, led by Mitra at Welltower. The health care sector's highest earner was Summit Therapeutics co-CEO Mahkam Zanganeh at $246 million. The pay figures underscore a widening gap between executives and their workforces that has drawn scrutiny from investors and shareholder advocates. The median pay ratio has risen every year since 2022, from 84-to-1 to 99-to-1. Investors will watch upcoming proxy seasons for increased say-on-pay votes and shareholder proposals targeting compensation practices. This article is for informational purposes only and does not constitute investment advice.