“What you have here is special,” Kapito said.

‘Something I’ve never seen’

Blackstone CEO and co-founder Steve Schwarzman, joined the event by video, but was no less effusive about his friends in the super sector. In a thoughtful interview conducted by Elia, the billionaire ranged over everything from the US presidential election (a battle of nearly complete opposites), relations between China and the US (“This is a little bit like two porcupines trying to make love. How do you do that? The answer is carefully”), and how to get ahead on finance (remember it’s an apprenticeship culture, and get the numbers 100 per cent right).

But Schwarzman really lit up when he revealed the big investing opportunity that he described as being “like something I’ve never seen”.

In 2021, Blackstone paid $US10 billion for data centre operator QTS. Today, Schwarzman told Elia, the business is now six times bigger than it was at acquisition.

Such is the pace of growth in the business – spurred, of course, by the artificial intelligence revolution – that Schwarzman expects it can grow “another few times” in the coming months, “given some of the discussions and the amount of money that’s been invested in this area is breathtaking”.

This AI boom is coming with challenges, not least of which is the risks posed by the technology.

“The people who are pretty much scared of the technology are the people who are inventing it,” Schwarzman said. “It’s the first time I’ve seen business people rooting for regulation.”

As has also been well-documented, the energy required to power and cool data centres is surging, creating calls across the world (including in Australia from NextDC chief executive, Craig Scroggie) for nuclear power to be deployed to power the AI boom.

“The amount of electricity that these data centres use is exceptionally high,” Schwarzman says, adding that, when combined with the electric vehicle boom, some parts of the US are “starting to run out of electricity”.

This theme was taken up by Kapito, who said with interest rates at current levels, investors happily sitting on cash needed to be careful that they don’t get run over by the wave of capital – some $US9 trillion in money market funds and another $US9 trillion in cash and cash equivalents – that will eventually flood back into public and private markets.

‘Cash is dangerous’

“Cash is dangerous over the long-term life of a portfolio,” Kapito added.

So where would Kapito be looking? His watchword was convenience. Given consumers want everything instantly, the best businesses must be able to sell instantly.

To do that, they need computer chips and data, which in turn will drive demand for data centres.

“If you were thinking about real estate, where would you buy real estate today? I would buy in places that I can actually build data centres that are around energy,” Kapito said.

While Kapito was singing from the same hymn sheet as Schwarzman, he was also talking his own book. In January, BlackRock paid $US12.5 billion to buy infrastructure fund manager GIP.

But Kapito was steadfast in his view that a shift towards a more data-heavy, AI-powered world would require a rethink of energy and infrastructure, particularly as the energy transition rolls on.

“We really believe every area of the world is going to go through an evolution or revolution – rebuilding industries, retooling them for energy.”

In a pitch to his Melbourne super industry audience,Kapito said the infrastructure opportunity would favour longer-duration investments that have a yield – “and that screams retirement to me”.

But like Schwarzman, Kapito ended with a note of warning on AI.

“This is going to be very hard to control. So we have to figure out how … we use it in a way that reflects our behaviour and our values, and that’s going to be a harder job than you think when you consider the global situation.”