This article first appeared on GuruFocus.
Alphabet (GOOGL, Financials) and Blackstone (BX, Financials) are forming an AI cloud venture to meet rising demand for data center capacity and computing power.
Blackstone will invest an initial $5 billion in equity to help bring 500 megawatts of data center capacity online in 2027. The venture could expand over time as companies seek more computing resources for advanced workloads.
The business will provide data center capacity and access to Google’s Tensor Processing Units, the company’s custom chips, through a compute-as-a-service model. Google Cloud CEO Thomas Kurian said the venture will give organizations another way to access TPU capacity.
Blackstone has named longtime Google executive Benjamin Sloss as CEO of the new venture.
The deal reflects how large technology and investment firms are working together to fund the infrastructure behind faster computing growth. Blackstone has been increasing investments in data centers, power generation and transmission assets.
Investors will watch how quickly the venture scales and whether demand for Google’s custom chips helps Alphabet gain more share in cloud infrastructure.
