Milken flags capital flows, AI impact
- Blackstone, Apollo, State Street, Mubadala, and Carlyle used Milken’s May 4 conference to warn that geopolitics and AI are reshaping where big money goes. - State Street’s Ron O’Hanley pointed to $3.2 trillion already deployed by Gulf sovereign funds, calling the Iran war a trigger for capital-flow realignment. - The bigger shift is structural: private markets keep absorbing funding, while AI spending is judged less on hype than measurable productivity.
Money managers went to Beverly Hills this week and talked less like cheerleaders than traffic controllers. At the Milken Institute’s Global Conference on May 4, executives from Blackstone, Apollo, State Street, Mubadala, and Carlyle kept circling the same point: capital is moving, and the map investors used a few years ago is getting redrawn. ### Why did this Milken panel matter? Because these are the firms and institutions that sit close to the plumbing of global finance. When Blackstone and Apollo talk about where funding is available, or when State Street talks about cross-border flows, they are not guessing from the cheap seats. They are describing how the largest pools of money are actually behaving in real time. ### What was the clearest signal on capital flows? Ron O’Hanley of State Street gave the sharpest version. He said the Iran war could drive a “big realignment” of capital flows, and he tied that to Gulf sovereign wealth money already moving at huge scale. His number was $3.2 trillion deployed by Gulf states and sovereign wealth those flows do not stop — they reroute. ### Why are Gulf flows such a big deal? Because sovereign wealth money is patient, large, and strategic. It can back infrastructure, private equity, credit, and technology over long timelines. So when executives say Gulf capital is becoming more central, they are really saying the marginal buyer in a lot of markets may be less tied to old U.S.-Europe patterns than investors got used to in the 2010s. That changes pricing power, partnerships, and who gets funded first. ### Where does private credit fit in? Apollo’s Jim Zelter and Mubadala’s Waleed Al Mokarrab Al Muhairi basically argued that the hand-wringing around private credit has missed the larger story. Zelter said recent worries around BDCs were a small slice of a much bigger expansion in private capital. His point was blunt: comp private credit is filling a real market need, even if portfolios now need more attention to resilience and manager selection. ### So is the IPO market the thing losing out? Not exactly losing out, but getting disintermediated. If private capital can fund companies longer and at larger scale, public markets stop being the default destination and start becoming one option among several. That is a big shift because it keeps more growth, and more influence, inside private hands for longer. ### What did they actually say about AI? Harvey Schwartz of Carlyle cut through the usual AI fog. He said the real win comes when companies deliver better outcomes, innovate faster, and become more productive. He explicitly pushed back on the idea that AI’s main economic story is mass unemployment. Basically, the buyers in this room want proof of output, not just bigger GPU bills and louder demos. ### Why does that matter for investors now? Because AI is moving from a theme trade to a capital-allocation filter. The easy phase was funding anything adjacent to chips, models, or data centers. The harder phase is deciding which companies can actually convert AI spending into margins, speed, or market share. Schwartz’s framing suggests big allocators are starting to reward that second category more aggressively. ### What’s the bottom line? The Milken message was not “risk off.” It was more specific than that. Capital is still abundant, but it is getting choosier, more private, and more geopolitical. And AI is no longer just a story investors tell — it is becoming a test of who can turn spending into productivity.
