Markets ignore geopolitics as AI, data centres power new growth cycle: Schwarzman

Stephen Schwarzman arrived at Davos with a simple observation: the world's investors have stopped worrying about geopolitics and started betting on electricity. Speaking to CNBC-TV18 at the World Economic Forum in January 2026, the Blackstone chairman and CEO laid out a thesis that explains why markets have remained resilient even as headlines scream about tensions in West Asia, Latin America, and disputes over Greenland. The geopolitical risks are real, he acknowledged, but they haven't resolved into anything that changes the economic math. "There are more questions than answers," he said. Meanwhile, something else entirely is reshaping how capital flows.

The US economy expanded 4.3 percent in the most recent quarter—a number that would be unremarkable for a developing nation but is almost unheard of for a mature, high-income country. Schwarzman noted that sustained growth above 4 percent in America is something that "almost never happened in decades." The driver is not mysterious. Hyperscalers—the global technology giants pouring money into data, social media, and artificial intelligence—are building data centers at a pace that accounts for roughly three-quarters of that growth. This is not a cyclical bump. It is a structural shift in how capital is being deployed, and it is happening almost entirely in the United States.

But data centers need power. After nearly two decades during which US electricity demand flatlined, the grid is now facing a potential shortfall. The AI workloads running on these new facilities consume electricity at scales that the existing infrastructure was never designed to handle. Schwarzman was direct about the implication: "For data centres to keep being built, you need electricity." Electricity demand is expected to grow 5 to 6 percent annually going forward—a sharp reversal from the stagnation of the previous 20 years. The electric grid, he said, will require "massive expansion—50% type expansion at a minimum," with some projections suggesting even higher requirements.

This is where Schwarzman's positioning becomes clear. Blackstone is the world's largest builder of data centers and also the largest owner of them. The firm is simultaneously a major investor in modernizing and expanding electricity infrastructure. "As investors, being in these two areas with increased concentration has turned out to be a simply wonderful outcome," he said. The firm manages close to $1.3 trillion in assets globally, including around $500 billion in private credit alone. Some of Blackstone's businesses are growing at 20 percent annually.

The broader context matters. Interest rates have been coming down in both the United States and Europe after years of elevated borrowing costs that followed pandemic-era inflation. This shift is thawing conditions for fundraising in private equity, a business that had been difficult when rates were high and investors who had bought deals near market peaks found themselves unable to exit positions. With rates declining, the cycle is turning again. Real estate, private equity, and private credit are all entering what Schwarzman described as "a more favourable phase."

When asked whether he believed the supercycle of fundraising would continue into 2026, Schwarzman's answer was essentially yes—but with a caveat that the cycle is conditional on the economic fundamentals holding. The fundamentals, in his view, are the AI-driven transformation of the US economy, backed by unprecedented investment in the physical infrastructure that makes AI possible. Geopolitical uncertainty exists, but it has not yet crystallized into something that disrupts those fundamentals. Markets are betting that it won't. For now, capital is flowing toward the technologies and infrastructure shaping the next phase of economic expansion, and the geopolitical noise remains in the background.