QTS Data Centers: Blackstone and QTS to build data centers worth $8bn for "once in a generation" AI growth

The premier property fund of Blackstone, valued at $68 billion, is selling assets and preparing to invest billions in data centers. According to the Financial Times, Blackstone Real Estate Income Trust, or Breit, intends to invest $8 billion in the construction of new data centers through its asset QTS Data Centers, as it anticipates an increase in artificial intelligence jobs. 

From the first quarter of 2021 to the third quarter of 2022, Breit invested approximately $60 billion in hotels, warehouses, and self-storage facilities. Since then, however, the trust has not made any significant purchases and has sold more than $10 billion in assets. The company intends to sell a Texas resort for $800 million and self-storage properties for $2.2 billion to build data centers in preparation for a possible AI wave.

The Financial Times reports that Blackstone has committed more than $8 billion to construct new data centers, most likely for hyperscalers. Blackstone acquired QTS Realty Trust in September 2021 for $10 billion. The company has already spent over $1 billion purchasing land to construct new data centers in five states across the United States, and QTS' leased space has tripled since it was acquired. The company is preparing to double in size, according to the Financial Times, and QTS' valuation has increased to approximately $20bn.

Analysts and industry figures predict an influx of investment in artificial intelligence. Last month, analyst firm Dell'Oro Group predicted that data center capital expenditures would reach $500 billion by 2027 to support AI workloads. TD Cowen reported that a record 2.1 GW of data center leases were signed in the last 90 days due to AI requirements.