Monroe Capital Won’t Touch AI Data Centers. Blue Owl Is Doubling Down

Investment executives were split over the artificial intelligence boom at the CAIS Summit this week, with some describing it as a generational investment opportunity, while others cautioned that surging data center spending could end in costly losses.

Blue Owl Capital (NYSE:OWL) is doubling down on AI infrastructure as a rare opportunity that investors may not always be able to pursue, Bloomberg reported.

Speaking in a separate interview, Lipschultz highlighted data centers as a key driver of that potential. He added that Blue Owl’s real assets division, which includes its digital infrastructure real estate vehicle, has become the firm’s fastest-growing business segment.

Meanwhile, CEO of Monroe Capital, Ted Koenig, stated during the CAIS panel that the firm is steering clear of data center investments as a whole. 

"You have too many risks: water risks, power risks, community risk, political risk. I won’t touch those deals," he said.

Drew McKnight, co-CEO of Fortress Investment Group, warned that major infrastructure booms have historically left some investors facing significant losses. While AI is likely to produce major winners, he cautioned that not every investment tied to the technology will pay off.

McKnight added that while equity investors may see potential returns, credit investors would be subject to greater losses if there is a downturn in the market.

The CEO cited a recent force majeure notice Oracle Group sent to the developer of a New Mexico data center highlights companies’ growing need for assurances that they can exit projects if circumstances change. 

The company is seeking to defer payments if Project Jupiter, a data center being developed by a Blue Owl Capital unit encounters setbacks and misses its planned 2028 launch.

Vista Equity Partners Robert Smith said AI could significantly improve profitability by allowing businesses to cut production and support costs through enterprise software and AI agents.

He argued that companies with profit margins around 30% could potentially raise them to 60% or 70% while maintaining similar growth rates, adding that engineers who fail to adopt AI risk falling behind.

Photo Courtesy: Kplandee on Shutterstock.com