Google and Blackstone are plotting a $5 billion AI cloud outfit to flog Google chips at Nvidia’s turf.
According to the Wall Street Journal Google and Blackstone plan to create an artificial intelligence cloud company to challenge outfits such as CoreWeave, using Google’s specialised chips.
The pair said they plan to launch the unnamed US company with $5 billion in equity capital from Blackstone. The move is Google’s biggest attempt yet to sell and monetise its chips beyond its cloudy empire. It will sharpen its rivalry with Nvidia, the market leader in AI computing.
The new company aims to bring 500 megawatts of capacity online in 2027. That is roughly the same amount of electric power needed to serve a midsize city, with more capacity planned later.
The companies are setting up the venture as demand for computing power to train and run advanced AI models reaches daft levels. Most major AI companies currently depend, at least in part, on computing infrastructure from CoreWeave, which uses Nvidia chips.
Google last month introduced a new processor customised for AI inference, the computing needed to run models rather than train them. Google has introduced a new version of its chips designed specifically for training models.
Under the partnership, Google will supply hardware, including its specialised Tensor Processing Units (TPUs), as well as software and services to the venture. Google executive Benjamin Treynor Sloss will serve as the new company’s chief executive.
Blackstone will be the majority owner, people familiar with the matter said. It is expected to support about $25 billion in compute investments. Google and Blackstone have identified data centres likely to become part of the venture. Some are already being built, the people said.
Industry observers have wondered for years whether Google would commercialise its TPUs for broad use. The technology giant has signed two big outside deals.
One deal gives Claude-maker Anthropic access to about one million of Google’s chips. Another covers Facebook owner Meta Platforms.
Blackstone is one of the cocaine nose jobs of Wall Street’s most active investors in AI. It reckons it is the world’s largest provider of data centres. In 2021, Blackstone struck a deal to buy data centre operator QTS Realty Trust. In 2024, it agreed to buy data centre operator AirTrunk.
The firm has made significant investments in CoreWeave, Anthropic and OpenAI, among other AI-related companies.
