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00:00You find yourself in the middle of an extremely busy week with everything happening around the
00:04UN. And on Thursday, we're getting this meeting between President Xi and Trump. So far, the news
00:08from it, at least from Secretary Besant, has been that it's been productive conversations.
00:13You've been in many a room where these types of negotiations happen. What is what is the best we
00:17can hope for here? Well, first of all, having been through these meetings many times, there's
00:22nothing that's going to be they're not winging this. OK, everything is orchestrated, especially
00:26as vis-a-vis the Chinese. So my assumption is it's going to be three topics, right? There's
00:30going to be trade, which I think is going to be an interesting topic. It's going to be
00:35Iran and how they can help Trump end this. And basically, it's going to be AI. And what
00:41they've decided to do on all three of those have basically already been decided. And how
00:46the theater of it is will be everyone's guess. But I think ultimately, no, these like these
00:53little get togethers aren't like, hey, let's just talk and then we'll decide what to do.
00:57I love this idea because it often feels like the global world markets business is like
01:01hinging on what happens. Like we're going to base our outcomes. There's this narrative
01:05that maybe outcomes will be shifted based on what happens with this meeting. I mean,
01:08Blackstone itself is a behemoth in Asia. I know you just raised a $13 billion Asia PE fund.
01:13How do you think about it from a global business perspective, given what you've just said?
01:16Is this meeting less consequential for how the global business world thinks about the relationships
01:21between the two? Listen, China's important. It's important to American consumers. It's important.
01:26The Blackstone, it's important to the world's security. I mean, just think about the conversation
01:31we're having around AI and the importance of the race that's going on between the United States
01:35and China. That is real. That's not made up. That's not propaganda. That's real. And having these
01:40two guys spend time with each other is only beneficial. What comes out of it, you know,
01:46I think is, as I pointed, is probably relatively a moderate, what kind of decisions will come out
01:52or announcement will come out because that's the way these summits work. But I don't think it hurts
01:56us as a country to be talking to our most important competitor, both economically and yes,
02:02militarily. So I'm all in for the meetings, but I have low expectations and hopefully those will be
02:08met. It's difficult in this moment. It's hard not to be cynical about the changes that actually
02:13occur. You could even take tariffs as an example, which, by the way, the U.S. has delayed until
02:18this meeting when it comes to China and at the same time is threatening new tariffs on Europe if
02:22Canada goes through with an associate EU membership in a hostile way, whatever they deem that to be.
02:27But this is a world and this is a business community that has continued to execute deals,
02:31has done M&A, has found a way around it. Will anything change this time around as we await
02:37the next round of tariffs?
02:39Well, you know, John Grealis talks about tariff diplomacy, which is what President Trump has
02:44used this for. You know, we can debate, does it work, does it not work? But that's how he uses
02:48trade
02:49as a diplomatic tool to get things done the way he wants them done. Now, to track it all,
02:55and I think the issue can be sometimes you don't know what's going to happen Monday versus Wednesday,
02:59but it hasn't stopped us, someone like Blackstone, from not only raising capital but deploying capital
03:05all over the world, including places where we're having some struggles. We, as you know,
03:09there was a big meeting in Canada this week where we played a prominent role in, huge investment
03:15thesis in Canada.
03:16By the way, did you go to that?
03:17I did not, but John went with a bunch of our team and it was really important to show not
03:22only is the
03:22United States investing in Canada, but Canada wants to invest with U.S. companies. So I think
03:27ultimately, even though there's a lot of noise in the system, and there are, there's lots of noise,
03:32not only in Asia, but in Europe, it doesn't stop companies like us from thinking about where the,
03:37where the puck is going and to, to drive solutions towards our big ideas.
03:43Hockey reference is very apt.
03:44Well, that was not good how I figured that out.
03:46It was absolutely perfect.
03:47I'm from Minnesota, so it's a very easy thing for me to do.
03:49I'm, I'm, I'm wildly impressed. What do you make of Canada's moment, of, of Mark Carney's moment
03:54on the global stage that he's, he, I mean, it's really started since Davos when he gave that speech
03:59about having the middling countries come together. Listen, I'm a big fan of Mark Carney's and
04:03obviously it's not easy for him. Listen, at the end of the day, getting into a fight or a
04:07disagreement with the United States is not a simple thing, but I think Mark Carney, who's
04:11experienced, look what this guy has accomplished both in Europe and Canada as a business executive
04:16and to be able to do this, it's not as, he wasn't a walking politician and he's, I think he's
04:21conducting himself in the right way. Listen, this is not the end. This is maybe the beginning of the end,
04:27but there's going to be lots of to-in and fro-in, but I give Mark Carney a lot of
04:30credit for
04:31basically trying to do what he thinks is in the best interest of Canadians at the same time,
04:36expanding the marketplace. And that's why we think there's such a huge opportunity for firms like
04:40Blackstone in Canada, but also working with the Canadians as they begin to work this through.
04:45What kind of stuff is it? Is this like energy infrastructure?
04:48Energy, infrastructure, AI, consumers. You know, John likes to talk about picks and shovels. I mean,
04:55real, you know, issues around pipelines and renewables and everything across our platform
05:02we're investing in Canada. And so we see huge defense tech. One of the themes of this meeting
05:07was defense tech. Every one of those themes is something that we care about and the Canadians
05:12care about as well. All right. Speaking of career roadmap from politics and otherwise, I mean,
05:16you certainly have an interesting one yourself. For those that don't know, an illustrious career
05:20from Morgan Stanley State Department ambassadorship coming into Blackstone as a vice chairman. It's
05:25it's an unusual route, I guess. So what is your day to day like? What are your client interactions
05:30with? Are you having to play therapist, hold their hand and be like, it's going to be okay,
05:33even though it feels like the world is teetering on the edge of fire?
05:36The good news is no one at Blackstone needs their hand held. I guess I have the opportunity to sit
05:40next to Steve Schwarzman, who I have an enormous respect for. John Graves around the corner. So we
05:47all get to hang out together. First of all, this, you know, I got to I was lucky I got
05:51to choose where
05:52I wanted to go. And talk about being a lucky kid. I'm a little Jewish kid from Minnesota, okay? And
05:57I
05:57was able to have a really good career both on Wall Street and in government. But coming to a place
06:03like Blackstone is a phenomenal opportunity. First of all, they're everywhere. It's a global
06:07institution, right? They care deeply about doing the right thing for their clients. They care deeply
06:12about those who are investors. It's about as I'm learning every day, it's about results. And I sit
06:17around those Monday morning meetings with with Steve and John and go through the whole portfolio and
06:22all every single one of the the operating guys folks come to the Monday morning meeting and talk
06:27about what their investment thesis are. So it's a it's a for someone who's a you know, has been around
06:32this game for a long time as a CEO Morgan Stanley and that credit suites, as you pointed out, I've
06:38seen it. This is as good as it gets. And I'm very happy to be involved. Can I just say
06:41it's such an
06:42interesting time to have your background because you are a global firm in a world that feels like
06:46it's asking you to not be global, that it's asking you to choose sides, whether it be the West versus
06:52China and alliances there. Does that change how you think about Blackstone's global position? I think
06:57it's great. I mean, listen, I mean, listen about, you know, Steve was involved in China before China
07:03was hot. And obviously, we're still engaged in China. We you know, we started our operations in
07:08Asia, as you know, you know, 40 years ago, we've been, you know, 20 years in Asia celebration in
07:13Europe. We're we're big in India, we're big in we just talked about Canada. And we're we're a goal.
07:19What's what's what's tracks is me to Blackstone. We're everywhere with all of our prize. It doesn't
07:25matter if it's of its infrastructure or it's hotels. It doesn't matter if it's we're focusing
07:31on on AI or different issues around renewables. It's just who Blackstone is. We are everywhere
07:38around the world and hoping to be able to attract not only capital, but at the end of the day,
07:43it's all about results. I mean, as as Steve says, you know, we don't like to lose money. We don't
07:47lose
07:47money. And we try to make sure that we are performing at a level that our clients want to invest
07:53with us. And we've been pretty successful. Good news. I've had nothing to do with success,
07:56but I can ride on the coattails of the success. Very modest of you. One of the reasons for more
08:02recent success has been data center investments from from Blackstone. How are you looking at the
08:08midterms when it comes to this? Because it's been such an issue. And I wonder if you see it as,
08:13you know, Texas, for example, stopping new permits for data centers or the various localities,
08:18putting moratoriums on there. Is this just a now moment? Is this because we're heading into the midterms?
08:22Or do you concern? Are you concerned about a serious slowdown in development because of the
08:27political backlash? Well, first of all, if it's interesting, which I learned when I got to
08:31to Blackstone, you know, one of the ideas, you know, Steve was very involved in the idea of
08:35AI a long time ago. He started gave a bunch of money to MIT to talk about AI ethics and
08:41AI.
08:42And John's whole view was originally Gray's whole idea that this phone and this this little thing
08:47called the phone, the compute power, which is one of the impetus of us buying QTS and, you know,
08:53five, six years ago. Yes. AI was was being talked about, but nothing like it is today.
08:57I think, first of all, I think on the data centers, you know, you know, I think we've probably lost
09:01the narrative here a little bit and we're going to have to do a better job. Not just this, the
09:06hyperscalers, but everyone, first of all, these, these data centers are actually providing really
09:11well-paid jobs. I mean, as someone who's been involved in democratic politics for a long time,
09:15jobs are important and these are highly paid. Not only the, the, the guys who are building them,
09:20but the electric engineers that are putting the machines in. The second issue is that the
09:23communities, listen, these communities are concerned that their bills are going to go up,
09:27their electric bills. And I think that the hyperscalers have now made it very clear your bills
09:31will not go up. And in many cases where those, those machines are, bills are going down. And, and, and,
09:38third, I think was as important as anything is the tax revenues. These things are created.
09:42That all said, we need to do a better job and, and relieving people's anxiety about data centers,
09:48but how do you do that? Well, first of all, I think one of the things is we've talked about
09:51is AI in general. I think a lot of the anxiety around the data centers is a general anxiety around
09:57AI. And I think as the industry now, as you've seen over the last two weeks, they're articulating
10:02what things that we need to do to keep people to understand that they're a thoughtful process.
10:07What does that mean? It means anything from, you know, you know, is there going to be guard
10:11rails over the next period of time? There probably should be, meaning there should be conversations
10:15where it happens. There's going to be a lot of smart people talking about this. But just like we do,
10:19like when you get on an airplane, you feel good because the FAA has made sure the planes don't
10:24hit into each other or your drugs and the FDA. We're going to need, because AI is going to be
10:30so
10:30important to our daily life, there'll need to be guard rails around it. And I believe a lot of smart
10:36people, both Democrats and Republicans and the administration and the industry will come
10:40together to put those things in place. And I think that's good for everyone.
10:44Just quickly, in an investing world, do these AI investments need to have more of those risks
10:48understood? For example, when an IC meets and they write a memo about an AI investment,
10:53should one of the risks in there be like, oh, and this thing might kill us all? Like,
10:56is that a true risk that we should be analyzing right now?
10:59I think what we should be doing is stepping back and looking at a couple of things. First of all,
11:03the level of productivity that we're seeing, even in the companies that we own, the 270 portfolio
11:08companies that we own, is going to be immense. And it's going to drive productivity and it's going to
11:13join not only the productivity of how we produce what we produce, but also the breakthroughs that we're
11:19going to get for science and health and the environment, all the things that we care about.
11:23Do we also have to make sure that we are doing it safely? 100%. We make sure that people, as
11:28this
11:28technology is growing at lightning speed, that we're smart about it? Without question. I don't
11:33think you'll find anyone in the industry that doesn't believe that. How we get there is going
11:38to be really important. I think it's important to us. It's important to humanity. I think we'll get
11:42there because this is so cool. This is so interesting. It's so innovative. And listen, I'm not a genius on
11:49this, but I see it every day. I mean, you would see it every day in what you do and
11:52who you
11:53talk to. But we will need to have the right guardrails around it. And I think a lot of really
11:57smart people will figure it out.