Alphabet Inc.’s Google agreed to create an artificial intelligence cloud business with Blackstone Inc., aiming to compete with companies like CoreWeave
Inc. in a burgeoning market.
The project will rely on an initial $5 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 $25 billion, a person familiar with the matter said.
By 2027, the goal is to have 500 megawatts’ worth of computing capacity. The data centers will run Google’s homegrown 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 CEO 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 center capacity to house them — aiming to satisfy an influx of demand from internal users and outside customers.
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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 center acquisition vehicle, which aims to buy already-built and leased properties benefiting from the artificial intelligence boom.
Blackstone, which has more than $1.3 trillion in assets under management, bills itself as the largest global provider of data centers. It acquired data center 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.
