Some of the largest names in commercial real estate are no longer content to just buy proptech software. Blackstone and Brookfield have each backed multibillion-dollar joint ventures this year built to develop artificial intelligence tools in-house, rather than licensing them from independent startups. The shift raises an obvious question for the proptech industry that has spent the past decade selling software to landlords, brokers, and property managers: if the biggest customers start building their own AI, what happens to the vendors?
Why This Is Trending Now
The question sharpened in May 2026, when two multibillion-dollar AI joint ventures landed on the same day. Anthropic announced a $1.5 billion partnership with financial heavyweights including Blackstone and Goldman Sachs, later named Ode, aimed at building custom AI deployments for large enterprise clients. Hours later, OpenAI unveiled a separate $10 billion joint venture with TPG, Brookfield, Bain Capital, Advent, and SoftBank, built specifically around real estate portfolio companies. Neither announcement was exclusively about property technology, but both signaled that some of the deepest-pocketed players in real estate now see enough value in owning their AI stack to fund it directly.
What Happened?
According to reporting from Commercial Observer, industry experts expect in-house proptech development at firms like Blackstone and Brookfield to eventually tackle the same core workflows independent proptech companies already handle, including portfolio management and underwriting. Yet the same experts describe the moves as the emergence of another pillar in the proptech investment market rather than a sign that startups are about to be squeezed out. The numbers support that reading: proptech venture capital investment reached $16.7 billion in 2025, up 68% from the previous year, according to the Center for Real Estate Technology and Innovation (CRETI). AI-native companies alone captured $4.5 billion of that total, growing their share of proptech VC dollars 42% year-over-year, roughly double the growth rate of traditional software-as-a-service competitors.
What It Means for the Industry
The pattern lines up with broader enterprise AI adoption trends we’ve covered in why enterprise AI spending keeps climbing in 2026: large, well-capitalized companies are increasingly willing to build custom AI tools rather than wait for off-the-shelf vendors to catch up. Ashkan Zandieh, managing director of CRETI Ventures, argues the shift mirrors what already happened in banking, retail, and health care, where internal enterprise software teams ultimately grew larger vendor ecosystems rather than replacing them. Zandieh said large owners building AI capabilities won’t shrink the proptech sector, framing the moves as a sign of market maturity rather than a threat. The five largest independent proptech companies, CoStar Group, Yardi Systems, RealPage, Procore, and AppFolio, together reported about $9.2 billion in fiscal 2025 revenue and are expected to remain the anchors of the sector regardless of how the newer joint ventures play out.
How It Could Affect Businesses and Consumers
For proptech startups, the immediate effect is a more competitive fundraising environment as investor dollars increasingly favor AI-native companies over legacy software-as-a-service products, a dynamic explored in our earlier coverage of how AI agents are changing enterprise workflows in 2026. For property owners and asset managers, the practical effect could be more choice: firms too small to fund their own AI development will likely still rely on independent vendors, while larger institutional owners may increasingly build tools tailored to their own portfolios. For tenants and renters, most of this activity remains behind the scenes for now, showing up gradually through faster leasing responses, more accurate pricing, and predictive maintenance rather than any visible change to how they interact with a building.
Key Benefits and Opportunities
Separate industry research from Buildium found that AI adoption among property management companies jumped from 20% in 2024 to 58% in 2025, and firms that have adopted AI expect roughly 31% portfolio growth in 2026, compared with 12% for non-adopters. Analysts estimate AI and automation could unlock $430 billion to $550 billion in annual value across real estate, construction, and development. Brokerage giant JLL offers a template other large firms may follow: through its venture arm, JLL Spark Global Ventures, the company has invested roughly $450 million across about 55 proptech startups since 2018, combining internal development with startup investment rather than choosing one path exclusively.
Risks and Challenges
Building enterprise-grade AI in-house is harder than it looks for an industry that has historically lagged behind pure technology companies. Columbia researcher Josh Panknin, who has studied the broader $50 billion to $60 billion proptech startup landscape, has cautioned that real estate firms are not technology development companies and have not matched that track record historically, an obstacle that leaves room for independent startups to keep competing. Real estate data itself compounds the challenge: it arrives from widely different sources, formats, and market definitions, which makes it difficult for any single AI system, whether built in-house or bought off the shelf, to scale cleanly across markets. Broader doubts about AI valuations, underscored by a sharp technology stock decline in late July 2026, could also cool some of the enthusiasm behind these large joint ventures before they fully play out.
What Experts, Companies, or Regulators Are Saying
Travis Connors, co-founder and general partner at Boston venture firm Building Ventures, said the new AI joint ventures create a noisier fundraising environment for startups but views the underlying shift as an industry finally catching up on technology adoption after years of underinvestment. He noted that real estate leaders are now actively seeking AI solutions for nearly every process, a change from a decade ago when technology was rarely the default answer. JLL principal Ajey Kaushal described his firm’s approach as resting on four pillars: build, buy, partner, and invest, a framework other large real estate companies may increasingly adopt as they decide how much AI capability to develop internally versus purchase from vendors.
What Happens Next?
Expect more large asset managers to announce their own AI partnerships or internal development efforts over the next year, following the template set by the Anthropic-backed Ode venture and the OpenAI Deployment Company. At the same time, expect proptech venture funding to keep concentrating around AI-native startups rather than traditional software-as-a-service products, and expect the five dominant independent proptech vendors to keep defending their positions in data, property management, and construction workflows even as new capital enters the space from both venture funds and the real estate giants themselves.
Conclusion
Blackstone and Brookfield building their own AI tools looks less like the end of independent proptech and more like a sign that real estate has finally started treating technology as core infrastructure rather than an optional upgrade. Independent vendors, especially the AI-native ones now pulling in a growing share of venture funding, appear positioned to keep growing alongside the industry’s biggest owners rather than being replaced by them. The more interesting question over the next year may not be whether large real estate firms build or buy their AI, but whether either approach can handle an industry as fragmented as real estate at real scale.
