Episode summary
Blackstone Bet on Chips Drove a Debt Boom That’s Upending Credit | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Dina Bass, Jay Chaudhry, Ray Madoff, Jessica Dupuy
Summary
The episode centers on how AI infrastructure is reshaping credit markets. Dina Bass explains that Blackstone, Apollo and other alternative asset managers have helped create a new market for chip financing through SPVs, because newer AI companies and neoclouds often cannot borrow like the big hyperscalers. She says the CoreWeave deal in 2023 was an early blueprint, and the market has quickly expanded toward $1 trillion as investors try to fund expensive AI chips that are becoming more central than the data centers themselves.
The conversation then turns to cybersecurity, where Jay Chaudhry argues that AI is widening both the scale and severity of threats. He says PHP flaws show how a single vulnerability can spread across a huge share of the web, and that enterprises need a new model built around hiding applications and using zero trust rather than relying on patching alone.
Ray Madoff argues that the wealthy are effectively written out of the tax system because they live off appreciated assets, borrow against wealth, and pass gains to heirs with little or no tax. Jessica Dupuy closes the show with a culture-and-consumer segment on Italian wine, highlighting how producers and regions from Tuscany to Sicily are winning American drinkers.
Key takeaways
- Dina Bass says chip-financing SPVs have grown from almost nothing in 2023 to a market tracking toward $1 trillion.
- Bass argues AI infrastructure is increasingly dependent on debt because neoclouds and AI labs often lack investment-grade balance sheets.
- Jay Chaudhry says the PHP flaws show AI-era cyber risk is both broad and deep, with 70% of websites exposed and a severity score of 9.4.
- Chaudhry says enterprises need zero trust and application-hiding approaches because patching alone is not enough.
- Ray Madoff argues the tax code favors wealth over wages because billionaires can borrow against stock and pass gains with little taxation.
Notable quotes
“Blackstone, Apollo, pretty much all of the uh, you know, US-based investors, alternative asset managers”
“There was you know one deal uh done for Coreweave by Blackstone back in you know 2023 and at 2 billion”
“Now that uh market is tracking towards 1 trillion”
“the wealthy are able to avoid taxes because they are able to avoid taxable income”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenc.
Uh our next reporter has been looking into a Blackstone bet on ships that is driving a debt boom that is upending credit. And then another story, it's a Bloomberg big take today. Uh Jane Street and rivals now fighting for AI power as they compete for an edge in the AI era.
So let's get to it with Dena Bass. Uh she is AI infrastructure reporter at Bloomberg News joining us from Seattle. So much to get to with you, Dina.
Um, tech and high finance, the intersection of such a lot going on. Blackstone really doubling down. Um, tell us a little bit about uh your story when it comes to their bet on chips.
Sure. And it's not just Blackstone, it's Blackstone, Apollo, pretty much all of the uh, you know, US-based investors, alternative asset managers. And it's fascinating that you bring up the railroads because the AI buildout, a lot of people will call look back to the railroads as as an, you know, an effective analog.
There aren't that many analoges. And that's kind of why we're here. What's gone on is that you know for the longest time we've been talking about cloud for more than a decade but what was going on was the the large investment grade hyperscalers Amazon Microsoft Google they were basically paying for this buildout and for these chips either with their own cash or they're investment grade so they can borrow on their own balance sheet now that we have this massive buildout that also involves neoclouds uh you know either who either don't have investment uh you know don't have credit rating ratings or aren't investment grade.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- chip-backed debt
- private credit
- ai expansion
- credit markets
- data centers
Companies and tickers mentioned
- BX
- ZS
- Blackstone
- CoreWeave
- Zscaler
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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