The alpha, twice a week
That was 3 min.
Get the best new moments in your inbox every Wednesday and Saturday. It's free.
Check your inbox
We sent a link to your address. Click it to finish signing up. Not there in a minute? Look in spam.
or
Inside Blackstone · 3 min · Sep 29, 2026
AI data centers are changing software economics and operations
Eric Schmidt says AI companies’ revenue now depends on data-center capacity, making infrastructure a major business opportunity. He also describes connecting company data and computers to improve operations.
Eric Schmidt is CEO and chair of Relativity Space, former Google CEO.
Scaled Google as CEO through 2011, now runs rocket maker Relativity Space and co-founded Schmidt Sciences.
- CA
Christine Anderson, Host · Global Head of Corporate Affairs, Blackstone
About this segment
Eric Schmidt says AI companies’ revenue now depends on data-center capacity, making infrastructure a major business opportunity. He also describes connecting company data and computers to improve operations.
From “Former Google CEO Eric Schmidt: The Road to Superintelligence”, Sep 29, 2026. Watch the full episode
Thanks. We'll look at and fix what's off.
“your revenue is completely determined by your data centers.”
Eric Schmidtat 24:59 · Inside Blackstone24:59Takeaways
- AI companies’ revenue is increasingly tied to data centers.
- Schmidt compares infrastructure providers to the picks and shovels of a gold rush.
- Connected company data can help surface operational insights.
In this episode
Full episode- 11:59AI self-improvement raises an alignment problem4:50
- 16:38Long reasoning is advancing, but original discovery remains hard4:08
24:38AI data centers are changing software economics and operations2:57
- 4 more moments in the full episode
Transcript
From the transcript Inside Blackstone publishes with the episode.
- 24:44
they're amazing productivity tools, but I'm going to take us back now to data centers. The case for data centers was made long before artificial intelligence, for mobile, and cloud computing, and cybersecurity. All these things that it helps enable, yet now there's so much concern around data centers, what's your take? Well, if you're running one of these AI companies, your revenue is completely determined by your data centers.
- 25:10
So, this is a massive change in what I do. It used to be that software was pretty high gross margin, you could sort of sell it, didn't have a lot of capital. Because you need the hardware, that's what's changed the economics. So, in the short term, it's the same thing as in the gold rush, the people who made all the money were the pickaxes and so forth and so on, the infrastructure. Picks and shovels, we have a whole thing on this, Eric.
- 25:35
And this picks and shovels thing is real. So, from the standpoint of the economy, those are huge, they're real businesses. There's an estimate that 11% of US electricity demand in 2030 will be AI data-center-related. That's an extraordinary transition by any measure. Historically it was 2% or 3%. So, and that build-out is one of the primary drivers of economic growth in America today. So, thank goodness for that.
- 26:03
If you could leave CEOs with one takeaway today, what would it be? The term that I've been using is being an AI-native CEO. So, what I'm trying to do in all my things is I'm tying to fully automate the execution of the businesses. In the factory floor in Relativity, I was walking through it one day and I thought, how many computers are here? So, I said, why don't we connect them all? So, they just connected all the computers.
- 26:27
And so, the immediate thing that they can do, using AI, is they can look at, sort of, utilization, cross utilization times in new ways. It occurs as a natural byproduct of getting the digital systems connected. Furthermore, if you take generic data, unstructured data, and you connect it all, these systems are smart enough that they can interpolate between one data normalcy and another. In other words, they can combine disparate datasets and give you business insights.
- 26:54
So how do I make more money? How do I increase customer retention? How do make sure I don't lose a customer? You can ask these questions. What I've been struck by is that when you take open-source data, that is public data, plus the proprietary data in your business, and you put it into a system, and you start asking questions, I go crazy over it. You can now talk across all of the data. You can get data fusion.
- 27:21
You can actually figure stuff out. It drives me crazy a little bit, though, when I do have content given to me that is generated by the computer. Is it correct? Some is and some isn't.