Work stress can improve investor performance amid market bubbles, says Blackstone COO

Last updated Feb 8, 2026

Understanding Market Bubbles and AI Investments: Insights from Blackstone’s Jon Gray

Handling Stress in High-Stakes Investment

Working under stress can sometimes be beneficial, especially when you’re managing investments worth millions. Conversations around potential market bubbles could, in fact, make investors more astute in their decision making.

According to Blackstone’s President and COO, Jon Gray, the present environment filled with negativity could be a blessing in disguise. Bubbles in AI, stock markets, and private credit market may induce caution and prevent any reckless investment strategies.

The Concerns Surrounding AI Investments

Big Tech companies are heavily investing in Artificial Intelligence leading to concerns whether these investments will yield the expected returns. The private credit market has experienced significant growth in recent years. However, notable defaults have stimulated fears around potential hidden risks.

Contrasting the dot-com era with the current market situation, Gray explains that there’s not a straightforward parallel, at least not yet. He cites the Cisco example and compares it with Nvidia’s trading today.

Blackstone and AI Hype

Jon Gray joined Blackstone, a private market giant managing $1.3 trillion in assets, in 1992. He was part of the inception of its real estate business and played a significant role in its growth.

He sheds light on the AI hype and mentions how it’s always a risk if people start believing that “trees grow to the skies.”

Learning From Failures and Successes

Gray shares his lesson from an unsuccessful investment in a building in California during the late 1990s. He emphasizes the importance of not doubling down on strategies that have worked in the past and assuming they’ll always bring success.

The acquisition of Hilton Hotels by Blackstone in 2007 and how it turned into one of private equity’s most successful real estate deals is another example Gray brings up. This changed his outlook on investing, now focusing more on the “neighborhood” of his investment rather than the minutiae of dollar amounts.

Key Takeaways

Gray emphasizes that even if you make a poorly timed investment and pay a large premium, if you get the underlying tailwinds, the quality of the business, and the management team right, it could still turn out okay.

Understanding market bubbles and AI investments, and the role of caution can indeed make investors better at their jobs as they navigate the complexities of the investment landscape.