Google and Blackstone form $5 billion AI cloud venture to meet surging demand for specialized chips

Google, Blackstone plan AI cloud venture with $5 billion backing, WSJ reports

May 18 (Reuters) - Alphabet's Google (GOOGL.O), opens new tab and Blackstone (BX.N), opens new tab plans to launch an artificial-intelligence cloud company using Google's specialized chips, the Wall Street Journal reported on Monday, citing sources. Blackstone, the world's largest alternative asset manager, is expected to contribute $5 billion in equity and hold a majority stake in the unnamed U.S. venture, with a deal expected to ⁠be announced in a few hours, the report said. Google will supply hardware, including its specialized chips known as Tensor Processing Units, or TPUs, as well as software and services to the venture, the WSJ reported. Reuters could not immediately verify the report. Google and Blackstone did not immediately respond to a Reuters' request for comment. Analysts and investors say Google ⁠is taking a sizeable share of new AI-driven computing demand, helped by its business tools and custom chips that have lured customers such as Anthropic. Long-time Google executive Benjamin Treynor Sloss will ⁠serve as CEO for the new venture, according to the WSJ report. The world's largest companies are ramping up investment in artificial ⁠intelligence. Last month, Alphabet, Amazon, Microsoft and Meta signaled that AI spending would not slow down, with combined ⁠outlays now expected to exceed $700 billion this year, up from about $600 billion previously. Reporting by Natalia Bueno Rebolledo and Mrinmay Dey in Mexico City; Editing by Sherry Jacob-Phillips Our Standards: The Thomson Reuters Trust Principles., opens new tab

Blackstone will create a new TPU cloud in a joint venture with Google.

Today, Blackstone announced a joint venture with Google to create a new TPU cloud, giving customers more choice and flexibility in how they access cloud TPUs. Blackstone is making an initial $5 billion equity commitment to bring an expected 500MW of capacity online in 2027. Google will supply TPUs, software and services to the new company. This partnership combines Google's advanced AI compute technology with Blackstone's expertise in digital infrastructure to help meet surging global demand for advanced AI workloads. You can find out more in Blackstone's press release.

Google, Blackstone launch AI infrastructure joint venture - SiliconANGLE

Google LLC and Blackstone Inc. are launching a joint venture that will provide a "compute-as-a-service" platform for artificial intelligence workloads. The companies announced the collaboration on Monday. The yet-unnamed venture is launching with $5 billion in equity funding from Blackstone, which will reportedly receive a majority stake. The investment is said to be worth $25 billion including leverage, a term that usually refers to debt financing. The venture will be led by Benjamin Treynor Sloss, a long-time Google executive who currently serves as its Chief Programs Officer. In that capacity, Treynor Sloss oversees many aspects of the search giant's cloud business including its data center design efforts and network. The new venture will reportedly use the search giant's custom Tensor Processing Unit, or TPU, AI chips to power its infrastructure. The processors are currently only available through Google Cloud. Last month, Alphabet Inc. Chief Executive Officer Sundar Pichai revealed that the company will let a limited number of customers deploy TPUs in their data centers. He cited demand from "capital markets firms" as one factor behind the decision. Blackstone is one of the world's largest institutional investors with about $1.3 trillion in assets under management. According to the firm, that sum includes more than $150 billion worth of data centers. Google debuted its two newest AI chips, the TPU 8t and TPU i8, last month. The processors are optimized for training and inference workloads, respectively. When a chip receives a prompt, it splits the message into chunks and assigns each one to a different core. After all the cores process their respective chunks, the chip collects the results and distills them into a single prompt response. Google's inference-optimize TPU 8i processor includes a module called the CAE that is specifically optimized to speed up that phase of the inference workflow. According to the company, the engine can reduce the latency involved in the task by a factor of five. The TPU 8t also includes multiple task-specific optimizations. One of them is is a module called the SparseCore that enables the processor to more quickly retrieve the data needed for a training run from memory. For added measure, Google ships both of its new chips with a suite of networking technology called TPUDirect. It speeds up the flow of data center traffic by enabling packets to bypass components such as servers' central processing units. "This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era," said Google Cloud CEO Thomas Kurian The TPU clusters in Google data centers include many auxiliary components that the search giant developed in-house. The TPU 8i, for example, is deployed in so-called pods that use a custom architecture called Boardfly. It's possible that Google's joint venture with Blackstone will adopt not only GPUs but also other custom components of the search giant's AI infrastructure. The newly formed company will initially build 500 megawatts of computing capacity. Google and Blackstone plan to significantly expand its data center footprint over time. The deal raises the possibility that the investment firm may also bring GPUs to its other portfolio companies. In 2024, Blackstone spent $16.1 billion to buy Australian data center operator Airtrunk. Three years earlier, it acquired another AI infrastructure builder called QTS Realty Trust for $10 billion.

Google, Blackstone plan AI cloud venture with $5 billion backing: WSJ - The Economic Times

Google and Blackstone are reportedly planning to launch a new AI cloud company, with Blackstone contributing $5 billion in equity for a majority stake. The venture will leverage Google's specialised AI chips, hardware, software, and services. Long-time Google executive Benjamin Treynor Sloss is slated to lead the new US-based company.Alphabet's Google and Blackstone plans to launch an artificial-intelligence cloud company using Google's specialised chips, the Wall Street Journal reported on Monday, citing sources. Blackstone, the world's largest alternative asset manager, is expected to contribute $5 billion in equity ⁠and hold ⁠a majority stake in the unnamed U.S. venture, with a deal expected to be announced in a few hours, the report said. Google will supply hardware, including its specialized chips known as Tensor Processing Units, or TPUs, as well as ⁠software and services to the venture, the WSJ reported. Reuters could not immediately verify the report. ⁠Google and Blackstone did not immediately respond to a Reuters' request for comment. Analysts and investors say Google is taking a sizeable share of new AI-driven computing demand, helped by its business tools and custom chips that have lured customers such as Anthropic. Long-time Google executive Benjamin Treynor Sloss will serve as CEO for the new venture, according to the WSJ report. The world's ⁠largest companies are ramping up investment in artificial intelligence. Last month, Alphabet, Amazon, Microsoft and Meta signalled that AI spending would not slow down, with combined outlays now expected to exceed $700 billion this year, up from about $600 billion previously.

Google-Blackstone New AI TPU Company: 5 Huge Anthropic, Leadership And Google Cloud Things To Know

Google and data center management giant Blackstone are creating a new AI cloud company that will sell Google Cloud TPUs and compute capacity. CRN breaks down Blackstone's $5 billion investment, the sales strategy, who will lead the new company and more. "This new company has enormous potential as it helps to meet the unprecedented demand for compute," said Jon Gray, president and COO of Blackstone, in a statement. From who the leader of this new company will be to boosting Google's hardware competition with Nvidia to Blackstone's recently announced new AI services company with Anthropic, there's a ton to unpack in Google's new venture with the data center investor. CRN breaks down the five biggest things Google Cloud customers and partners need to know about Google and Blackstone's new company. [Related: Google Cloud Vs. AWS Vs. Microsoft Azure Q1 Earnings Face-Off] New York-based Blackstone will make an initial $5 billion investment in Google to bring 500 MW of cloud capacity online by 2027. Blackstone plans to scale data center capacity significantly over time. "We see a generational opportunity to invest capital at scale building AI infrastructure," Gray said. The Takeaway: Blackstone has $1.3 trillion in assets under management. With this new Google joint venture and war chest of money, it plans to become a major infrastructure and Compute-as-a-Service player in the AI era. Google and Blackstone have yet to name the new company. However, it has selected a leader for the new company in Google Chief Program Officer Benjamin Treynor Sloss. Sloss has been with Google for over 22 years, most recently leading a team of 14,000 engineers as the company's head program officer. He joined Google in 2003 and began climbing the ranks over the next two decades, including vice president of engineering. He's been responsible for global networking, Google server operations and global data centers, to name a few, over his long tenure. The Takeaway: Sloss is a highly experienced Google leader who knows the company inside and out, including data center designing, planning, construction and engineering. It appears he may be the right match to lead the new company. The new company led by Sloss will provide data center capacity, operations, networking and Google Cloud's TPUs as Compute as a Service. The new business will offer access to Google's TPUs in a model similar to other cloud providers that offer AI infrastructure, such as CoreWeave. In addition to supplying hardware, Google will provide software and services to the new company. The new venture will also provide customers with an additional way to access cloud TPUs beyond Google Cloud. "We are incredibly proud to partner with Google -- bringing together their world-class TPUs and AI capabilities with Blackstone's exceptional strength in energy and digital infrastructure," Gray said. The Takeaway: Google's TPUs are an alternative to industry leader's Nvidia's GPUs. The new company aims to offer customers of all shapes and sizes an alternative to Nvidia. It is key to know that just this month, Blackstone said it will form a new AI services company alongside Anthropic. Anthropic and Blackstone -- along with investment giants Hellman & Friedman and Goldman Sachs -- are creating an AI services company that will work with midsize companies across sectors to bring Claude into their most important operations. Applied AI engineers from Anthropic will work alongside the firm's engineering team to identify where Claude can have the most impact, build custom solutions and support customers over the long term. The Takeaway: It is interesting to see how committed Blackstone is in forming not just strategic partnerships or deals, but full-blown new companies with AI leaders like Google and Anthropic. Google Cloud is the world's third largest cloud computing provider with its flagship Google Cloud Platform. Key to Google Cloud's success over the past decade has been CEO Thomas Kurian, who led the company's infrastructure charge around TPUs. "This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era," Kurian said. Google uses Nvidia GPUs for some of its cloud infrastructure but is seeking to reduce its reliance by continuing to build its own TPUs. Google's TPUs are custom chips purpose-built for AI and optimized for training and inference of advanced AI models. Google's TPUs also power its most popular AI products and tools, including Gemini and Google Workspace, which it delivers to billions of users globally. The Takeaway: Kurian is taking its TPU strategy to the next level with the new Google-Blackstone company seeking to drive Google's TPU sales. In addition, Google TPUs will be seen as an alternative to Nvidia's GPUs. "Together, we're accelerating AI transformation and providing more options for organizations to access accelerated compute capability," Kurian said.

Google-Blackstone AI Venture Targets Exploding Demand For Compute Power With $5 Billion Initial Data Cent

Google And Blackstone Launch AI Infrastructure Venture In an announcement release, Blackstone said it will initially invest $5 billion in equity to help bring 500 megawatts of data center capacity online by 2027, with plans for future expansion. The total investment value could eventually reach $25 billion, including leverage, the Wall Street Journal reported, citing people familiar with the matter. The new company will offer data center capacity alongside Google's custom-built AI chips, known as Tensor Processing Units, or TPUs, through a compute-as-a-service model. The setup is designed to help businesses access high-powered AI computing resources without building their own infrastructure. AI Data Centers And TPU Demand Continue To Surge The partnership comes as demand for AI computing capacity continues to soar amid the rapid adoption of generative AI tools and enterprise AI applications. Big Tech companies are expected to spend more than $800 billion on AI infrastructure in 2026 alone, including data centers, networking equipment and advanced semiconductors. The venture will be led by Benjamin Treynor Sloss, a longtime Google executive who has spent more than two decades overseeing the company's global infrastructure and operations. Blackstone Fundraising, Google TPU Push Last week, it was reported that Blackstone was raising capital for its third private equity fund. The fund plans to invest in eight to 10 companies with deal sizes ranging between $800 million and $1 billion. Price Action: Alphabet Class A shares closed up 0.04% at $396.94 on Monday, while Alphabet Class C slipped 0.05% to $393.11, with both stocks rising in after-hours trading. Blackstone closed down 0.72% at $117.04 during the regular hours and slipped another 0.14% in after-hours trading to $116.88, according to Benzinga Pro. According to Benzinga Edge Stock Rankings, BX is placed in the 82nd percentile for Quality, although the stock has been trending negatively across the short, medium and long-term. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Markus Mainka on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Google and Blackstone Team to Launch AI Cloud Venture | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The new venture is designed to provide "efficient data center capacity, operations, networking, and Google Cloud's tensor processing units (TPUs) as a compute-as-a-service offering," Blackstone said in its announcement Tuesday (May 18). Customers will have the option to access cloud TPUs along with using them through Google Cloud, the announcement added. "This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era," said Thomas Kurian, Google Cloud's CEO. "Together, we're accelerating AI transformation and providing more options for organizations to access accelerated compute capability." Google's TPUs are custom chips optimized for training and inference in advanced AI models, and are used by outside customers such as AI labs and other firms. The custom chips are also used to power Google's in-house AI offerings like Gemini. Under the terms of this new partnership, Blackstone will commit $5 billion to start, with the new company expecting to bring the first 500 megawatts of capacity online next year. "Google will supply hardware, including TPUs, as well as software and services to the new company so it can rapidly accelerate to meet the growing demand for accelerated computing, leveraging the benefit of Google's technical and domain expertise," the announcement added. A report on the new company by the Wall Street Journal notes that industry observers have for years wondered whether Google would commercialize its TPUs for widespread usage. Google has agreements with two outside companies, that report added: one with Anthropic giving the AI startup access to about one million of its chips, and another with Meta. In other AI news, PYMNTS wrote last week that while discussions of the technology tend to center around questions of supply, they always ignore the "harder half: demand." This came after Anthropic announced an small- to medium-sized business (SMB)-focused AI plugin for tools like PayPal, Intuit, Canva, and Docusign, a move that suggests AI's next stage could depend less on how much capability technology companies can offer and more on whether ordinary companies can sustain demand inside everyday work. "After all, the question facing the market is no longer simply whether frontier models can perform astonishing tasks," PYMNTS wrote. "It is whether accountants, nurses, insurance adjusters, teachers, procurement managers, financial analysts and their peers across Main Street can integrate AI into the highly specialized workflows they understand better than any Silicon Valley engineer."

Google and Blackstone Launch $5B AI Cloud Venture to Expand TPU Access

Google and Blackstone have launched a new AI cloud venture focused on expanding access to Google's TPU chips as demand for AI infrastructure and compute power continues to surge globally. Earlier this month, Blackstone also partnered with Anthropic and Goldman Sachs to form a new $1.5 billion artificial intelligence services company to deploy Claude to mid-sized businesses across sectors. As part of this partnership, Blackstone is making an initial equity investment of $5 billion in the company, which will offer data centre capacity, operations, and networking, along with custom Tensor Processing Units (TPUs) as a compute-as-a-service offering. The expects to bring the first 500 megawatts of capacity online in 2027, with plans to scale significantly over time. Apart from TPUs, Google will also supply software and services to the new company. Google has previously signed multi-billion-dollar agreements with companies such as Anthropic and Meta to provide access to its TPUs. "This joint venture with helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era. Together, we're accelerating AI transformation and providing more options for organizations to access accelerated compute capability," said Google Cloud CEO Thomas Kurian. Google veteran Benjamin Treynor Sloss, who has over two decades of experience building and operating the tech giant's global infrastructure and operations, will serve as the CEO of the new venture. Jasvinder Khaira, Head of Blackstone N1 (BXN1), said, "Capital alone doesn't build category-defining platforms - the right partner, the right structure, and the conviction to underwrite singular opportunities do. Google's TPUs, a decade in the making and foundational to the AI economy, are exactly the kind of platform BXN1 was built to back." Blackstone N1 is a new unit of Blackstone that focuses on its portfolio of investments in the AI ecosystem and high-growth technology sector.

Blackstone, Google form $5B data center venture for AI chips By Investing.com

NEW YORK - Blackstone (NYSE:BX) and Google announced a joint venture to establish a company offering data center capacity and access to Google's Tensor Processing Units as a compute-as-a-service offering, according to a press release statement. Blackstone will commit $5 billion in equity capital from managed funds for the initial phase. The investment represents a fraction of the firm's $145 billion market capitalization, and according to InvestingPro data, the company has maintained dividend payments for 20 consecutive years while posting a 16% revenue growth rate over the last twelve months. The venture expects to bring 500 megawatts of capacity online in 2027, with plans to expand thereafter. Google will supply hardware, including TPUs, along with software and services to the new company. TPUs are custom chips designed for AI training and inference of advanced AI models. Google states the chips have been in production for over a decade and are used by AI labs, capital market firms, and high-performance computing applications. The joint venture will provide customers an alternative option to access cloud TPUs beyond using them directly through Google Cloud. Blackstone has appointed Benjamin Treynor Sloss as CEO of the new company. Sloss is a Google executive with over 20 years of experience in building and operating Google's global infrastructure and operations. "We see a generational opportunity to invest capital at scale building AI infrastructure," said Jon Gray, President and COO of Blackstone. Thomas Kurian, CEO of Google Cloud, said the joint venture "helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era." Blackstone manages over $1.3 trillion in assets and operates in real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds. InvestingPro analysis indicates the stock is currently undervalued, with the company earning a "GOOD" financial health score. Investors can access comprehensive analysis through BX's Pro Research Report, one of 1,400+ available reports transforming complex Wall Street data into actionable intelligence. In other recent news, Blackstone Digital Infrastructure Trust Inc. has successfully priced its initial public offering at $20 per share, raising gross proceeds of $1.75 billion. The company has also provided underwriters with a 30-day option to purchase additional shares, potentially increasing total proceeds to $2.0 billion. Blackstone Inc. is also participating in a significant funding round for Quantum Systems, a German drone startup, alongside Airbus SE. This funding round is expected to raise approximately €600 million ($703 million) and could value Quantum Systems at up to €7 billion. Additionally, Blackstone has launched a new lending platform through its Real Estate Debt Strategies unit to support the construction of over 50,000 homes annually in the U.S. through Brio Homebuilder Solutions. In other developments, Blackstone is reportedly considering a buyout offer for Stroeer SE & Co., a German media group, with potential valuation reaching approximately €2.5 billion ($2.9 billion). This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Google, Blackstone plan new AI cloud company- WSJ By Investing.com

Investing.com-- Alphabet's (NASDAQ:GOOGL) Google and Blackstone Inc (NYSE:BX) plan to create a new artificial intelligence cloud company using Google's specialized chips, the Wall Street Journal reported on Monday. Blackstone will invest $5 billion in the company and will be the majority owner of the venture, the WSJ reported, citing people familiar with the matter. Get more breaking news on the biggest AI stocks by subscribing to InvestingPro The venture aims to bring 500 megawatts of computing capacity online by 2027, the WSJ report said, and will target substantially increasing capacity over time, the WSJ reported. The venture will likely rival AI compute providers such as CoreWeave Inc (NASDAQ:CRWV), and will also intensify Google's attempts to build and monetize its own AI computing chips, presenting potential competition to NVIDIA Corporation (NASDAQ:NVDA). Plans for the venture come as companies race to meet increasing computing demands from the AI industry. While Nvidia's processors are regarded as the most advanced, outsized demand in the industry has pushed smaller companies to seek alternative processors. Google had last month unveiled a new processor that is customized to run AI models. The company will supply its Tensor Processing Units chips, as well as software and services, to the Blackstone venture.

Google, Blackstone to launch AI cloud venture to meet data centre demand

May 18 (Reuters) - Alphabet's Google and Blackstone said on Monday that they will form an artificial intelligence cloud business venture aimed at capitalising on an insatiable demand for AI computing services. Blackstone, the world's largest alternative asset manager, will invest an initial $5 billion in equity to help bring 500 megawatts of data centre capacity online in 2027, with further expansion planned over time. The U.S.-based venture will provide data centre capacity along with Google's custom AI chips, known as Tensor Processing Units, or TPUs, through a compute-as-a-service model. The total investment value could reach $25 billion, including leverage, according to Bloomberg News. Both companies did not immediately respond to a request for comments on the Bloomberg report. Blackstone has appointed Benjamin Sloss, a long-time Google executive, as CEO of the new venture. Thomas Kurian, chief executive of Google Cloud, said the venture would help address growing demand for TPUs by offering organisations additional ways to access computing capacity. Analysts and investors have said Google is taking a sizeable share of new AI-driven computing demand, supported by its business tools and custom chips that have attracted customers such as Anthropic. "This isn't the biggest headline number we've seen. But it's a high-quality bet on sustainable growth in AI infrastructure," said Brittain Ladd, AI and supply chain consultant at Florida-based Chang Robotics. BLACKSTONE RAMPS UP AI INVESTMENTS Blackstone has stepped up investments in AI-related infrastructure, including data centres, power generation and transmission assets. Those investments are valuable as the AI boom pushes operators to secure long-term energy supply deals. The new partnership reflects rising demand for AI infrastructure and the need for large-scale capital deployment, Blackstone President Jon Gray said. Spending by Big Tech firms on AI infrastructure, including data centres, is expected to top $700 billion in 2026. (Reporting by Natalia Bueno Rebolledo and Mrinmay Dey in Mexico City; Editing by Sherry Jacob-Phillips) By Natalia Bueno Rebolledo and Mrinmay Dey

Google, Blackstone plan AI cloud venture with $5 billion backing, WSJ reports

May 18 (Reuters) - Alphabet's Google and Blackstone plans to launch an artificial-intelligence cloud company using Google's specialized chips, the Wall Street Journal reported on Monday, citing sources. Blackstone, the world's largest alternative asset manager, is expected to contribute $5 billion in equity and hold a majority stake in the unnamed U.S. venture, with a deal expected to be announced in a few hours, the report said. Google will supply hardware, including its specialized chips known as Tensor Processing Units, or TPUs, as well as software and services to the venture, the WSJ reported. Reuters could not immediately verify the report. Google and Blackstone did not immediately respond to a Reuters' request for comment. Analysts and investors say Google is taking a sizeable share of new AI-driven computing demand, helped by its business tools and custom chips that have lured customers such as Anthropic. Long-time Google executive Benjamin Treynor Sloss will serve as CEO for the new venture, according to the WSJ report. The world's largest companies are ramping up investment in artificial intelligence. Last month, Alphabet, Amazon, Microsoft and Meta signaled that AI spending would not slow down, with combined outlays now expected to exceed $700 billion this year, up from about $600 billion ?previously. (Reporting by Natalia Bueno Rebolledo and Mrinmay Dey in Mexico City; Editing by Sherry Jacob-Phillips)