Wall Street’s top alternative asset managers are betting on the AI boom by owning the infrastructure behind it and locking in rent through long-term leases.

With concerns growing that debt-laden neocloud companies at the heart of the AI infrastructure boom could default and that massive spending on the sector may fail to deliver adequate returns, industry executives are also emphasizing their focus on high-quality, long-term tenants.

Blue Owl Co-CEO Marc Lipschultz said the company owns physical infrastructure critical to the growth of the digital economy.

”We typically lease it out for 15 to 20 years with annual rent escalators, creating a highly predictable and growing stream of rental income for our investors,” Lipschultz said, adding Blue Owl focuses on limiting risks including those tied to short-term leases and token pricing.

Shares of alternative asset managers rose on Thursday, with Blue Owl up 6.5% and Ares Management gaining 2%. KKR and Blackstone each rose 2.5%, while Apollo Global gained 3.7%.

Data centers have become a critical part of the AI boom, housing the servers and computing equipment needed to train and run AI models.

As the world’s biggest technology companies race to expand computing capacity, demand for such facilities has surged, creating what industry executives have described as a generational opportunity for alternative asset managers.

Blue Owl said it has more than 130 data centers operating or under construction, representing nearly 14 gigawatts of leased and owned capacity, with another 21 gigawatts in its pipeline.

”We are not making a bet on AI when we invest in data centers,” Blue Owl CFO Alan Kirshenbaum said, adding that the company does not expect demand for computing power to decline.

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