Google and Blackstone have announced plans to establish a US-based AI cloud venture that will offer access to data centre capacity and Google’s specialized AI chips. Blackstone will make an initial equity investment of US$5 billion to support the venture, becoming the majority owner of the new business. This investment aims to bring 500 megawatts of data centre capacity online by 2027, with further expansion on the horizon.
The venture will provide compute capacity through a compute-as-a-service model, including access to Google’s Tensor Processing Units (TPUs) designed for developing and running AI models. The total investment value, as reported by Bloomberg News, could reach US$25 billion, including leverage. Benjamin Treynor Sloss, a long-time Google executive, has been appointed as the chief executive of the new venture.
Google Cloud chief executive Thomas Kurian highlighted that the partnership with Blackstone will cater to the demand for TPUs, offering organizations more avenues to access computing capacity. The new venture will compete in the same segment as neocloud providers like CoreWeave and Nebius Group, who sell computing power to AI companies using Nvidia graphics processing units.
In terms of financial performance, Alphabet’s recent results showed a significant increase in Google Cloud revenue, reaching over US$20 billion in the first quarter of 2026. The backlog for the cloud business nearly doubled quarter on quarter to more than US$460 billion. Blackstone’s investments in AI-related infrastructure, including data centres, have been substantial, with acquisitions like QTS and AirTrunk significantly expanding its data centre holdings.
The partnership between Google and Blackstone reflects the growing demand for AI infrastructure and large-scale capital deployment in the industry. Data centre operators are seeking long-term power arrangements to support the increasing power requirements of large computing workloads. The International Energy Agency projects a doubling of global electricity consumption from data centres by 2030, highlighting the importance of sustainable energy solutions in the sector.
Overall, the collaboration between Google and Blackstone signals a significant development in the AI cloud industry, with a focus on providing advanced computing solutions to meet the evolving needs of organizations. This strategic partnership is poised to drive innovation and growth in the sector, paving the way for a more interconnected and efficient digital ecosystem.
