Google and Blackstone Create AI Cloud Venture With $5 Billion Equity

Google and Blackstone have formed a new artificial intelligence cloud company, backed by an initial $5 billion in equity from the investment giant, to expand the market for Google’s custom AI chips. The venture, announced on Monday, will see Blackstone take a majority stake, with the total investment expected to reach $25 billion when leverage is included.

The new company will operate independently, offering Google’s Tensor Processing Units (TPUs) as a compute-as-a-service product to external customers. It aims to bring 500 megawatts of data center capacity online by 2027, with plans to scale further. Benjamin Treynor Sloss, a Google executive with over two decades at the company, will serve as the venture’s chief executive.

The partnership marks a significant strategic push by Google, the world’s third-largest cloud provider, to broaden the reach of its proprietary AI chips beyond its own cloud division. The move positions the new entity to compete with specialized “neo-cloud” providers like CoreWeave and Nebius Group, many of which are backed by and run on chips from Nvidia, the current AI chip market leader.

Google Cloud CEO Thomas Kurian stated the joint venture helps meet...