Google and Blackstone to create new AI cloud firm, sending neoclouds like CoreWeave and Nebius lower
Alphabet’s Google and Blackstone are creating a new US-based AI cloud company, backed by an initial $5 billion equity investment from Blackstone, the asset manager announced Monday — sending shares of rival AI cloud providers CoreWeave and Nebius down nearly 4% in premarket trading Tuesday.
The venture will operate as a “compute-as-a-service” provider, giving companies access to AI computing capacity powered by Google’s tensor processing units (TPUs), its own custom AI chips. The new company aims to bring 500 megawatts of data center capacity online in 2027, with “plans to scale significantly over time,” Blackstone said.
Blackstone is expected to be the majority owner, and the total investment could rise to $25 billion after adding debt, according to Bloomberg. Google will supply the hardware — including TPUs — as well as software and services. The new company will be led by longtime Google executive Benjamin Treynor Sloss.
The deal comes as demand for AI computing capacity surges, with companies racing to secure the chips, data centers, and power needed to train and run AI models. Google employees themselves now have to compete with Anthropic and Meta for access to Google compute.
The venture also marks Google’s most direct push yet to commercialize its in-house AI chips, challenging Nvidia’s GPUs, which powered much of the earliest AI boom.
Shares of Nvidia-backed AI cloud providers CoreWeave and Nebius fell on the news, while Alphabet was up slightly.
The venture will operate as a “compute-as-a-service” provider, giving companies access to AI computing capacity powered by Google’s tensor processing units (TPUs), its own custom AI chips. The new company aims to bring 500 megawatts of data center capacity online in 2027, with “plans to scale significantly over time,” Blackstone said.
Blackstone is expected to be the majority owner, and the total investment could rise to $25 billion after adding debt, according to Bloomberg. Google will supply the hardware — including TPUs — as well as software and services. The new company will be led by longtime Google executive Benjamin Treynor Sloss.
The deal comes as demand for AI computing capacity surges, with companies racing to secure the chips, data centers, and power needed to train and run AI models. Google employees themselves now have to compete with Anthropic and Meta for access to Google compute.
The venture also marks Google’s most direct push yet to commercialize its in-house AI chips, challenging Nvidia’s GPUs, which powered much of the earliest AI boom.
Shares of Nvidia-backed AI cloud providers CoreWeave and Nebius fell on the news, while Alphabet was up slightly.
