SAN FRANCISCO – Alphabet Inc.’s Google has agreed to create an artificial intelligence cloud business with Blackstone, aimed at competing with companies like Coreweave in the fast-growing market.
The project will rely on an initial US$5 billion (S$6.4 billion) in capital from majority shareholder Blackstone, according to a May 19 statement. Including leverage, the investment would be worth $25 billion, according to people familiar with the matter.
The goal is to achieve the equivalent of 500 megawatts of computing power by 2027. The data center will run Google’s own AI chips called tensor processing units (TPUs), which are used to develop and run AI models. Veteran Google executive Benjamin Trainor Sloss will become chief executive of the new business.
The move further fuels a boom in spending on computing infrastructure to support AI models and services. Google is expanding its line of AI chips and seeking additional data center capacity to house them, aiming to meet a flood of demand from internal users and external customers.
This new business will compete with so-called neoclouds such as CoreWeave and Nebius Group NV, which provide computing power to AI service providers. Many are backed by Nvidia, a leader in the AI chip market, and rely on the company’s GPUs (graphics processing units).
In early May, Blackstone held an initial public offering for its data center acquisition vehicle, Blackstone Digital Infrastructure Trust. It aims to buy already built and leased properties that will benefit from the artificial intelligence boom.
With over US$1.3 trillion in assets under management, Blackstone bills itself as the world’s largest data center provider. In 2021, it acquired data center operator QTS, and in 2024 it acquired Australian computing provider AirTrunk.
Google has already emerged as one of the biggest beneficiaries of the surge in AI spending. Sales of cloud computing businesses are soaring, and unique AI services are gaining popularity with consumers.
The Wall Street Journal earlier reported on the planned venture. bloomberg
