Blackstone to Make $300 Million Investment in AI Data Company

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The details

Private equity firm Blackstone is putting $300 million into DDN, a California-based company. This is the company's first outside financial investment, which values it at $5 billion.

Founded in 1998 by computer scientists Alex Bouzari and Paul Bloch, DDN is one of a limited number of companies that sell computing hardware and software used to manage and analyze data as AI models are developed and implemented.

It originally provided support for data management for government institutions and research organizations, such as facilitating complex simulations for pharmaceutical development and space exploration missions for the National Aeronautics and Space Administration.

The rationale

DDN's platform aids businesses in reducing the cost of using AI, according to DDN's CEO, Bouzari.

He mentioned that DDN plans to use Blackstone's investment to quickly grow the AI data company's customer base among businesses.

A facility, built by Elon Musk's xAI in Memphis, Tennessee, which the tech mogul has stated will be scaled up to hold 200,000 of Nvidia's advanced AI chips.

While operating largely out of the spotlight, DDN is a major competitor that is likely to consider an initial public offering in the next couple of years, according to sources close to the matter.

The context

AirTrunk for $16 billion.

The chips themselves were used as collateral for the loans.

asa.fitch@wsj.com