This article first appeared on GuruFocus.
Alphabet (NASDAQ:GOOG) is moving more aggressively into the AI infrastructure race through a new cloud venture with Blackstone (NYSE:BX), a deal aimed at challenging neocloud players such as CoreWeave (NASDAQ:CRWV) and Nebius Group (NASDAQ:NBIS). Blackstone will commit an initial $5 billion in equity capital and become the majority owner, while the broader investment could reach $25 billion including leverage, according to a person familiar with the matter.
The new business is targeting 500 megawatts of computing capacity by 2027, with its data centers set to run on Google’s in-house tensor processing units, or TPUs, which are designed to build and operate AI models. Benjamin Treynor Sloss, a veteran Google executive, will become CEO of the venture, giving the business a direct connection to Google’s AI infrastructure playbook as demand for computing power continues to rise.
For investors, this could be another sign that the AI buildout is still pulling major capital toward data centers, cloud capacity and specialized chips. Google may gain another path to scale its TPU ecosystem, while Blackstone deepens its exposure to AI-linked infrastructure after acquiring QTS in 2021, buying AirTrunk in 2024 and holding an IPO for Blackstone Digital Infrastructure Trust. The move could also intensify competition for Nvidia (NASDAQ:NVDA)-backed GPU cloud providers, as Google and Blackstone build a well-funded rival around Google’s own AI chips.
