(May 19): Alphabet Inc’s Google agreed to create an artificial intelligence (AI) cloud business with Blackstone Inc, aiming to compete with companies like CoreWeave Inc in a burgeoning market.
The project will rely on an initial US$5 billion ($6.4 billion) in equity capital from Blackstone, which will become the majority owner, according to a statement on Monday. Including leverage, the investment will be worth US$25 billion, a person familiar with the matter said.
By 2027, the goal is to have 500 megawatts’ worth of computing capacity. The data centres will run Google’s home-grown AI chips called tensor processing units, or TPUs, that are designed to develop and run AI models. Veteran Google executive Benjamin Treynor Sloss will become the chief executive officer of the new business.
The move adds to a boom in spending on computing infrastructure, which underpins AI models and services. Google has been expanding its line of AI chips and looking for additional data centre capacity to house them — aiming to satisfy an influx of demand from internal users and outside customers.
The new business will compete with so-called neoclouds, such as CoreWeave and Nebius Group NV, which offer computing power to AI service providers. Many of them are backed by AI chip market leader Nvidia Corp and rely on that company’s GPUs, or graphics processing units.
Earlier this month, Blackstone held an initial public offering for Blackstone Digital Infrastructure Trust Inc, its data centre acquisition vehicle, which aims to buy already-built and leased properties benefiting from the AI boom.
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Blackstone, which has more than US$1.3 trillion in assets under management, bills itself as the largest global provider of data centres. It acquired data centre operator QTS in 2021 and bought Australian computing provider AirTrunk in 2024.
Google has already emerged as one of the biggest beneficiaries of the AI spending surge. Sales at its cloud computing business are surging, and its own AI services are catching on with consumers.
The Wall Street Journal reported earlier on the planned venture.
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