Google and Blackstone are forming a standalone AI cloud company that will sell Google’s own TPU chips to external customers, with Blackstone investing $5 billion for a majority stake. The total investment, including leverage, will reach $25 billion, the Wall Street Journal reported. Benjamin Treynor Sloss, a longtime Google executive, will run the little-known US venture as CEO.
The company is targeting 500 megawatts of computing power by 2027 and plans to expand beyond that. Blackstone and Google have already identified data centers that will be part of the project, with some still under construction.
In addition to being able to use TPU through Google Cloud, customers will also be able to access TPU through the new company, Google Cloud CEO Thomas Kurian said.
This joint venture with Blackstone will help meet the growing demand for TPUs specifically optimized for efficiency and performance in the AI era.
Kurian
Blackstone’s new AI unit just signed its second contract in two weeks
Blackstone manages $1.3 trillion in assets and operates more data center capacity than any other private investor. The company recently established an AI infrastructure division called BXN1.
The division is led by Jas Khaira, who previously ran Blackstone’s Coreweave Investments. “Capital alone cannot build a category-defining platform,” Kaira said. “Google’s TPU was developed over a decade and is the foundation of the AI economy, and is exactly the kind of platform BXN1 was built to support.”
Google’s latest venture is BXN1’s second transaction. The first, as reported by Cryptopolitan, was a $1.5 billion joint venture with Anthropic, Goldman Sachs, and Hellman & Friedman to sell Claude AI tools to private equity portfolio companies. A venture company sells tools. The other sells the computing that the tools run on.
“We believe there is a generational opportunity to invest significant capital in building AI infrastructure,” said John Gray, Blackstone’s president and chief operating officer. According to the magazine, the company acquired QTS Realty Trust in 2021 and AirTrunk in 2024. The company also owns shares in CoreWeave, Anthropic, and OpenAI.
Google finally lets its chips compete outside of Google Cloud
Until recently, Google held back on most TPU production for its own services. Anthropic has secured approximately 1 million chips through cloud agreements. Mehta signed another contract. Morgan Stanley predicts that production will reach 7 million cars by 2028, generating about $13 billion in revenue for every 500,000 cars sold.
Spinning off a separate company would allow Google to pursue large infrastructure deals without hurting Google Cloud’s reported profit margins. CoreWeave runs this way. The Stargate venture behind OpenAI is no different. Google is borrowing the model, but replacing it with its own silicon.
Alphabet, Amazon, Microsoft, and Meta all signaled in recent earnings calls that their spending on AI will not slow. Total capital spending is expected to exceed $700 billion in 2026, according to Reuters, up from a previous forecast of about $600 billion.
