Wall Street Firms Pitch Data Centers Amid Local Backlash
Investment firms like Blackstone and Blue Owl are launching data center funds to capitalize on AI growth despite rising political opposition and market volatility.
Wall Street investment firms are positioning data centers as a diversified real estate asset class to profit from the artificial intelligence boom. Blackstone launched the Blackstone Digital Infrastructure Trust, a public REIT focused on mature markets like Northern Virginia and Dallas, while Blue Owl Capital is considering a similar public fund valued up to $6.5 billion.
These investments face significant headwinds as approximately 70% of U.S. citizens oppose local data center construction. This bipartisan backlash has led to moratoriums on new hyperscale data center approvals in New York and Texas. In New Mexico, Oracle issued a force majeure notice for Project Jupiter, citing regulatory hurdles and local opposition as reasons for potential payment delays.
Market volatility has also impacted the sector. Both Blackstone's REIT and Brookfield Asset Management's Csquare have seen share prices decline by approximately 16% since their debuts.
