Greetings!  

On their earnings calls earlier in the week, Meta Platforms and SpaceX delivered the same underlying message to investors: demand for AI is running ahead of the supply of AI compute. On Thursday, another important player in the AI ecosystem—Blackstone, the alternative asset management giant—repeated a version of that refrain. 

On its own earnings call, the firm, a major investor at the center of the AI data center boom, faced pointed questions from analysts about rising financing costs and mounting investor concerns over the sustainability of the buildout. Its executives argued that the very factors threatening the AI industry’s expansion could actually work in Blackstone’s favor. CEO Steve Schwarzman noted that constraints on power availability and growing public opposition to new data centers are making it harder to bring new capacity online, potentially making existing facilities more valuable. Blackstone President Jon Gray also suggested the firm could seek higher returns on projects where it hasn’t signed leases yet in order to offset rising borrowing costs. 

Blackstone’s third-quarter results offered some support for that argument: Its infrastructure investments were buoyed by what executives called “extraordinary” data center leasing momentum, significantly outperforming its broader private equity and real estate holdings. “Despite all the negative things you’re reading about AI today, when we look across our business, this continues to be the area where we’re driving the highest returns,” Gray said during the call. 

But it’s hard to ignore the fact that the financing concerns and roadblocks threatening the broader AI infrastructure buildout are also hitting closer to home for Blackstone. Fears about rising financing costs have sent CoreWeave’s stock and bond prices plunging—the neocloud’s shares closed down another 10% Thursday after sliding last week—while Australian AI cloud provider Firmus abruptly pulled its initial public offering earlier this month. Blackstone has provided billions in loans to CoreWeave and has both invested in and lent money to Firmus. 

Blackstone has also been pressing ahead with brand-new AI ventures. In May, the firm announced an initial $5 billion equity commitment to a joint venture with Google to create a new cloud company that will use Google’s TPU chips, with plans to bring 500 megawatts of capacity online by next year. The venture could need as much as $25 billion in total investment, including some borrowed money, and it has reportedly encountered delays at potential data center sites. 

Blackstone, for its part, says that broader anxiety about AI hasn’t undermined its ability to raise fresh cash for making its own investments. “We’re continuing to be able to raise capital. Obviously investors are asking the same question around AI, but what we continue to see is demand and usage of the AI going up faster than the compute,” Gray said.

While Blackstone says it wants to continue going big in AI, it can only finance a tiny portion of the industry’s broader infrastructure buildout itself. The trillions of dollars of financing needed for chips and data centers in the coming years requires raising money from a far broader pool of investors. Blackstone itself has said it’s not clear where all the money will come from. 

Jas Khaira, the head of the team leading Blackstone’s push into AI investment, said late last month that the firm is still trying to determine which investors across the public debt and private credit markets will be able to provide the funding needed to sustain the buildout. 

“We have not mapped out who’s going to buy all the debt. We have some hypotheses, but the honest answer is we don’t know where all of it will come from,” he said at The Information’s AI Agenda event in San Francisco.

Data Center Headwinds

Despite Blackstone’s overall positive note on AI demand, we got fresh evidence Thursday afternoon of the uncertainty in the IPO market for companies in the data center business. Phoebe Liu and Valida Pau had a scoop that SB Energy, a company controlled by SoftBank Group that is developing an OpenAI data center in Ohio, is discussing a plan to put off its IPO until December or earlier next year. Previously, SB Energy was aiming to go public in September. The best hope for an SB Energy IPO is that the supply of AI compute gets so tight that investors start warming back up to data centers.—Nick Wingfield   

In Other News

• Meta Platforms’ stock fell 7% as investor enthusiasm over its third-quarter earnings report on Wednesday gave way to concerns about the probability that it will need to issue new equity to pay for its AI spending.
• Andreessen Horowitz renamed its flagship blockchain fund a16z Frontier, dropping “crypto” from its name (The Information’s earlier scoop on the change is here).
• Google partnered with energy company Voltus to pay homes and businesses to use less electricity during periods of peak demand.  

Today on The Information’s TITV

Check out today's episode of TITV, in which Akash Pasricha speaks with reporters Aaron Holmes and Leo Schwartz about the PHP security patch mayhem.

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Cybersecurity has been a dealmaking bright spot amid the broader software gloom, fueled by bets that AI adoption will boost demand for security products. But it’s been hard for private equity firms to get in on the sizzling sector. 

Corporate buyers have been snapping up cybersecurity companies, competition that makes it harder for private equity firms to buy at prices that leave room for attractive returns when they eventually sell. Rising interest rates further limit what the firms can pay in debt-heavy buyouts. 

That makes Thoma Bravo–backed cybersecurity company Proofpoint’s agreement last week to acquire data security company Varonis Systems in a $6.3 billion deal a notable example of how private equity can still find an opening in a hot market. And the tech-focused private equity giant is likely to do at least one more deal around this size in the coming year. 

The proposed acquisition values Varonis at around six times forward annual recurring revenue, according to a person close to the deal. That’s a discount compared to similar public companies like cloud security and compliance company Qualys, which is trading at around 8 times forward annual recurring revenue. 

Cybersecurity acquisitions were already booming heading into this year, including Alphabet’s $32 billion agreement to buy Wiz and Palo Alto Networks’ roughly $25 billion deal for CyberArk, both announced in 2025. But interest in the sector has intensified amid much-hyped releases of powerful models like Anthropic’s Mythos and a series of hacking incidents and agents gone rogue. It could further increase after Wednesday’s disclosure of AI finding a security flaw in open-source programming language PHP, which most websites use.

“People ended up realizing that the…threat vector effectively multiplied to infinity,” said Brian Thom, a managing director at middle market investment bank Brown Gibbons Lang & Co. with a focus on infrastructure software and cybersecurity.

Cybersecurity mergers and acquisitions hit a record 170 transactions in Europe and North America during the third quarter, according to an Arrowpoint Advisory report from earlier this month. Corporate buyers have been particularly active, including Accenture, which this summer acquired a majority stake in industrial cybersecurity company Dragos, plus two smaller companies in deals with a combined enterprise value of more than $4 billion. 

Thoma Bravo, for its part, saw an opportunity as Varonis’ stock price came under pressure. Varonis has spent recent years moving customers from licenses to cloud-based subscriptions, temporarily depressing revenue growth, and announced late last year it would phase out older software by the end of 2026. Its shares had tumbled nearly 50% from last October to around $33 this June, right before reports of a potential takeover surfaced. 

More broadly, some software-focused private equity firms are hunting for companies with depressed share prices but still-credible growth prospects that can hold up even under threat of AI disruption. And many are still nursing the hangover from a software binge during the low-interest-rate years of 2020 and 2021. 

The Varonis acquisition comes at a critical time for Thoma Bravo, which has owned Proofpoint since taking it over for $12.3 billion in 2021. Proofpoint is generating more than $1 billion in earnings before interest, taxes, depreciation and amortization, excluding the proposed Varonis acquisition, the person said, while five years under Thoma Bravo ownership puts it at the point when private equity firms typically face growing pressure to cash out. 

Adding Varonis expands Proofpoint’s capabilities beyond its traditional focus of protecting employees from cyberattacks, including phishing and other email threats, to securing sensitive corporate data and controlling who can access it, including employees and AI agents. Though Proofpoint has made previous acquisitions under Thoma Bravo, the Varonis deal is by far its largest and gives it a bigger foothold in AI-related defenses that could arguably help it become a more compelling candidate for an initial public offering. 

Thoma Bravo could be on the hunt for more multibillion-dollar cybersecurity acquisitions following the Varonis deal, which is set to close in the first half of 2027. 

“There’s a finite number of very large cybercompanies that we can invest in,” said Andrew Almeida, a Thoma Bravo partner who oversees cybersecurity and infrastructure software investments. 

The firm is particularly interested in companies that generate revenue from the growing use of AI agents rather than relying solely on traditional pricing models that charge based on the number of human users, he said, and it plans to have another deal similar to the size of Varonis within the next 12 months. 

“Having agentic revenue, not just an agentic vision, but agentic revenue, is a must. And then having a pricing model that can capture this upcoming and ongoing explosion of agents is also a must,” Almeida added. 

Wobbly IPO Window

All eyes are on when Anthropic will finally make its IPO paperwork public, marking one of the final steps toward its hotly anticipated debut. Anthropic announced it had confidentially filed in June, and by late summer was preparing for an IPO as soon as late September.  Now the latest chatter is that the filing could appear by the end of this week. 

Other AI-related IPOs that initially looked poised to go ahead of Anthropic’s have been pulled or delayed amid mounting concerns about the costs of financing data centers and chips, while the broader IPO market has lost momentum in the midst of Treasury volatility. That’s raised questions about who will test the market next—and whether Anthropic’s offering could revive IPOs in general. Some IPO advisers, however, say other companies may need to go public first, paving the way for the AI giant. 

“I don’t think Anthropic going public is going to open the floodgates,” said Edward Best, co-chair of Willkie Farr & Gallagher’s capital markets practice. “I think that Anthropic is going to wait until the water starts moving, and then if Anthropic comes through, it’s just going to widen the river.

“They can’t take the risk that they don’t do well. They’re going to wait until they see a better path, and then other people are going to join right afterwards,” he added.

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Cybersecurity has been a dealmaking bright spot amid the broader software gloom, fueled by bets that AI adoption will boost demand for security products. But it’s been hard for private equity firms to get in on the sizzling sector. 

Corporate buyers have been snapping up cybersecurity companies, competition that makes it harder for private equity firms to buy at prices that leave room for attractive returns when they eventually sell. Rising interest rates further limit what the firms can pay in debt-heavy buyouts. 

That makes Thoma Bravo–backed cybersecurity company Proofpoint’s agreement last week to acquire data security company Varonis Systems in a $6.3 billion deal a notable example of how private equity can still find an opening in a hot market. And the tech-focused private equity giant is likely to do at least one more deal around this size in the coming year. 

The proposed acquisition values Varonis at around six times forward annual recurring revenue, according to a person close to the deal. That’s a discount compared to similar public companies like cloud security and compliance company Qualys, which is trading at around 8 times forward annual recurring revenue. 

Cybersecurity acquisitions were already booming heading into this year, including Alphabet’s $32 billion agreement to buy Wiz and Palo Alto Networks’ roughly $25 billion deal for CyberArk, both announced in 2025. But interest in the sector has intensified amid much-hyped releases of powerful models like Anthropic’s Mythos and a series of hacking incidents and agents gone rogue. It could further increase after Wednesday’s disclosure of AI finding a security flaw in open-source programming language PHP, which most websites use.

“People ended up realizing that the…threat vector effectively multiplied to infinity,” said Brian Thom, a managing director at middle market investment bank Brown Gibbons Lang & Co. with a focus on infrastructure software and cybersecurity.

Cybersecurity mergers and acquisitions hit a record 170 transactions in Europe and North America during the third quarter, according to an Arrowpoint Advisory report from earlier this month. Corporate buyers have been particularly active, including Accenture, which this summer acquired a majority stake in industrial cybersecurity company Dragos, plus two smaller companies in deals with a combined enterprise value of more than $4 billion. 

Thoma Bravo, for its part, saw an opportunity as Varonis’ stock price came under pressure. Varonis has spent recent years moving customers from licenses to cloud-based subscriptions, temporarily depressing revenue growth, and announced late last year it would phase out older software by the end of 2026. Its shares had tumbled nearly 50% from last October to around $33 this June, right before reports of a potential takeover surfaced. 

More broadly, some software-focused private equity firms are hunting for companies with depressed share prices but still-credible growth prospects that can hold up even under threat of AI disruption. And many are still nursing the hangover from a software binge during the low-interest-rate years of 2020 and 2021. 

The Varonis acquisition comes at a critical time for Thoma Bravo, which has owned Proofpoint since taking it over for $12.3 billion in 2021. Proofpoint is generating more than $1 billion in earnings before interest, taxes, depreciation and amortization, excluding the proposed Varonis acquisition, the person said, while five years under Thoma Bravo ownership puts it at the point when private equity firms typically face growing pressure to cash out. 

Adding Varonis expands Proofpoint’s capabilities beyond its traditional focus of protecting employees from cyberattacks, including phishing and other email threats, to securing sensitive corporate data and controlling who can access it, including employees and AI agents. Though Proofpoint has made previous acquisitions under Thoma Bravo, the Varonis deal is by far its largest and gives it a bigger foothold in AI-related defenses that could arguably help it become a more compelling candidate for an initial public offering. 

Thoma Bravo could be on the hunt for more multibillion-dollar cybersecurity acquisitions following the Varonis deal, which is set to close in the first half of 2027. 

“There’s a finite number of very large cybercompanies that we can invest in,” said Andrew Almeida, a Thoma Bravo partner who oversees cybersecurity and infrastructure software investments. 

The firm is particularly interested in companies that generate revenue from the growing use of AI agents rather than relying solely on traditional pricing models that charge based on the number of human users, he said, and it plans to have another deal similar to the size of Varonis within the next 12 months. 

“Having agentic revenue, not just an agentic vision, but agentic revenue, is a must. And then having a pricing model that can capture this upcoming and ongoing explosion of agents is also a must,” Almeida added. 

Wobbly IPO Window

All eyes are on when Anthropic will finally make its IPO paperwork public, marking one of the final steps toward its hotly anticipated debut. Anthropic announced it had confidentially filed in June, and by late summer was preparing for an IPO as soon as late September.  Now the latest chatter is that the filing could appear by the end of this week. 

Other AI-related IPOs that initially looked poised to go ahead of Anthropic’s have been pulled or delayed amid mounting concerns about the costs of financing data centers and chips, while the broader IPO market has lost momentum in the midst of Treasury volatility. That’s raised questions about who will test the market next—and whether Anthropic’s offering could revive IPOs in general. Some IPO advisers, however, say other companies may need to go public first, paving the way for the AI giant. 

“I don’t think Anthropic going public is going to open the floodgates,” said Edward Best, co-chair of Willkie Farr & Gallagher’s capital markets practice. “I think that Anthropic is going to wait until the water starts moving, and then if Anthropic comes through, it’s just going to widen the river.

“They can’t take the risk that they don’t do well. They’re going to wait until they see a better path, and then other people are going to join right afterwards,” he added.

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