AI implementation needs business and technology leaders together

Transcript

From the transcript Inside Blackstone publishes with the episode.

1. 1:13

   All right, Rodney, thank you for joining us. Good to see you, Christine. Thank you for having me. All right, well you oversee our operating team. What that means is you go into our companies with your team and try to build value at these companies, try to improve them. So clearly AI, as we both know, driving the conversation and the question for all of us right now is can you implement AI at these companies at scale in a way that improves the value of these companies?

2. 1:36

   If you'd have asked me here a year ago, I think we would have talked about a lot of pilots and a lot of plans. One of my favorite probably overused jokes of the beginning of the year is: the biggest beneficiaries of AI in 2025 were dogs owned by software developers. So, every good software developer figured out how to use these tools before anyone else did, got their work done 45 minutes faster, and then could go home and walk the dog.

3. 2:00

   So, you know, it's great for pet health, right? We're all for it. Not necessarily good for the bottom line. Exactly. Oh my goodness. Yep. That's not what our CFOs or what our investors want to see. Now, we've got a good number of companies we can point to where how that company works is feeling very different. It's still early days, but we very much see it beginning to have an impact on the performance of the portfolio.

4. 2:22

   So which industries are seeing the greatest value created from AI? Yes, so, all of them? And what surprised me was at the beginning, we started with a strong hypothesis around software and services, right? And of course we spent a lot of time there. What surprised me though, is in pretty much every other industry there is an AI story to be told, right? And, you know, whether it's in industrials, right? With, for example, our company Chamberlain, where we're helping them build a whole new digital access business that wouldn't have been possible without AI.

5. 2:53

   Or whether in our healthcare businesses where you're thinking about everything they need to do from how they handle their data to how they interact with their customers that can be transformed. To real, to our consumer businesses, where the whole world of how consumers find information and make choices is changing dramatically and they really need to be on the forefront of it. And we’re seeing that across industry after industry.

6. 3:14

   What does that lead you to believe from a productivity boom standpoint? Well, I think we're probably already in it. What's different though, from maybe what people thought a couple of years ago is, it's hard, right? So, every company needs to sort of climb over this activation barrier, right? Put real effort in, right? Before they can really… Start to… …get the effort out. Yeah, it takes time. So what does that mean?

7. 3:35

   That means, one, it will take a little longer. Two, not everybody will be able to pull it off. By the way, as investors, we like that, right? The fact that it's hard means that the value once it's created will be a little stickier, right? It won't all get competed away. And maybe, hopefully, we have some differential advantage in creating that value, right? That is what we're aiming for. Finally, lessons for any CEOs or leaders that are listening about how they would think about AI implementation?

8. 3:59

   I'll give you two. Number one, focus. It is not everything everywhere all at once. It's like pick one to two things. And number two, think very carefully about who you're putting in charge. I've never seen this turn into business impact if it is tech-led alone. It needs to be led by business and tech together, working in a super tight, iterative partnership. That's hard, and that takes the right business leaders and time from the CEO themselves.

9. 4:21

   Well, fascinating insights.