Everyone plays nicer on the conference stage than in the boardroom, but it was a remarkably chummy start to the Milken conference in Los Angeles on Monday.
The reason, according to those onstage, is that elbows don’t have to be nearly as sharp when the investment needed to see the AI boom through is so massive.
The funding of artificial intelligence and the broader infrastructure to support the technology, including data centers, energy grid improvements, and more, has become the story of capital markets since OpenAI’s public release of its chatbot in late 2022.
Now, as James Zelter, the president of Apollo, said, “We all do a tremendous amount of work with each other,” talking about both his fellow panelists, including Blackstone’s Jon Gray, as well as the audience full of private-market investors.
Compared to the financial crisis, when “we were all very brutal competitors,” Zelter said the current “big ocean” of opportunities is ripe for partnerships, and capital is in high demand.
Investment-grade debt markets have been flooded with new issuances, he said, proving strong companies need capital. Monday morning kicked off with the announcement of a $1.5 billion joint venture between Blackstone, Hellman & Friedman, and Anthropic, along with other investors, including Goldman Sachs.
Any pessimism around private credit, how AI could disrupt the workforce, or the US economy in light of the Iran conflict was nowhere to be found on the panel, which also included Franklin Templeton CEO Jenny Johnson, BNY CEO Robin Vince, and Waleed Al Mokarrab Al Muhairi, the deputy CEO of the $375 billion Emirati sovereign wealth fund, Mudabala.
“We’re still probably the best dirty shirt in the laundry,” Johnson said about investing in the US. Mudabala has 44% of its portfolio in the country, and Gray believes there’ll be an explosion of blue-collar job growth in the coming years.
“You have to be quite negative if you don’t think it’ll be a tailwind,” Vince said about the amount of capital pledged and raised by companies to invest in their businesses.
And for investment managers, the current pressure from retail investors, institutions, and insurers alike is inconsequential if they can eventually generate returns.
“If we deliver that premium, it’s a good trade,” Gray said.
“This still has a long way to go.”
