The new U.S.-based company will sell access to Google's Tensor Processing Unit chips as a compute-as-a-service offering, with 500 MW of capacity targeted for 2027
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Blackstone and Google $GOOGL announced a joint venture to create a new U.S.-based company that will offer Google's Tensor Processing Unit chips as a compute-as-a-service offering, with Blackstone committing $5 billion in equity capital to the venture.
Through the venture, customers will gain access to Google's TPUs — chips purpose-built for AI training and inference — along with data center capacity, operations, and networking, making the chips available through a platform separate from Google Cloud. The first tranche of capacity — 500 megawatts — is targeted to come online by 2027, after which the venture intends to grow substantially, the company said.
On Google's side, the company will contribute its TPU chips and related hardware to the joint venture, along with software and supporting services. A majority ownership stake in the venture will go to Blackstone, The Wall Street Journal reported. The private equity firm oversees more than $1.3 trillion in assets and claims the title of the world's largest data center owner. When debt financing is factored in, total compute investment tied to the deal could reach $25 billion, according to Bloomberg.
Blackstone named Benjamin Treynor Sloss, who spent more than two decades at Google overseeing the build-out and operation of the company's global infrastructure, to lead the new venture as its chief executive.
"We see a generational opportunity to invest capital at scale building AI infrastructure," Blackstone President and COO Jon Gray said in a statement. Thomas Kurian, CEO of Google Cloud, said in a statement that the venture "helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era."
The Google venture marks the second deal out of Blackstone N1, a recently established division within Blackstone that consolidates the firm's artificial intelligence investment activity. Its first deal, announced earlier this month, was a $1.5 billion partnership involving Anthropic aimed at distributing AI tools to enterprise customers, according to The Wall Street Journal. Jas Khaira, who leads Blackstone N1, spearheaded the firm's prior investment in CoreWeave, a competing neocloud provider that relies on chips from Nvidia $NVDA.
The venture positions Google to broaden commercial access to its TPUs at a moment when demand for AI computing infrastructure is rising. Providers like CoreWeave, whose infrastructure runs on Nvidia graphics processing units, have become a primary source of computing power for the majority of leading AI developers. Separately, Google has extended TPU access to outside companies including Anthropic and Meta $META Platforms through prior agreements, The Wall Street Journal reported.
Sites for the venture's data centers have already been selected, with construction underway at some locations, according to The Wall Street Journal.
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