Blackstone Israel Head Ifat Oron: AI Is Not in a Bubble, Infrastructure Faces Massive Shortages

Ifat Oron, senior managing director and head of Blackstone Israel, recently argued that the artificial intelligence sector is not currently experiencing a bubble, pointing to soaring global infrastructure demands and significant computational shortages. Speaking at a conference organized by Globes in partnership with the Phoenix, Bank Leumi, and Strauss, Oron emphasized that data centers currently account for less than one percent of global infrastructure, while soaring energy and hardware requirements present massive hurdles.

"If you look at data centers worldwide, they are less than 1%—there is not enough computing power in the world," Oron told Globes reporter Meital Weisberg. "Building one gigawatt costs nearly 50 million dollars. The US has 70 gigawatts, and the market needs 200 to 230 gigawatts. This requires millions in investment. This is not software; these are long processes of getting chips ready, generators ready, infrastructure that needs to be built, a lot of regulation, and a vast amount of electricity that does not exist and must be generated."

Oron oversees Blackstone's investments in Israel, noting that the firm evaluates broader global trends rather than single isolated transactions. Blackstone currently manages approximately 1.35 trillion dollars in assets globally. Discussing software trends, Oron noted that while certain AI startups scale from seed funding to multi-billion-dollar valuations within a single year, data-driven investing across a massive global ecosystem remains the key to identifying sustainable industry leaders.

Addressing Israel's position in the global tech ecosystem, Oron praised the resilience and multi-disciplinary adaptability of local entrepreneurs. "Israel is very small globally, but it manages to produce a large amount of tech companies that move the needle," Oron stated. "We have the required talent, the required agility, and the ability to build companies managed locally that are global in every sense."