Google and Blackstone plan to create a US-based AI cloud venture that will provide access to data centre capacity and Google’s custom AI chips.
Blackstone will make an initial equity investment of US$5 billion to support the venture. The firm will be the majority owner of the new business. The companies said the investment will help bring 500 megawatts of data centre capacity online in 2027, with further expansion planned.
The venture will offer compute capacity through a compute-as-a-service model. It will include access to Google’s Tensor Processing Units, or TPUs. The custom chips are designed to develop and run AI models.
Bloomberg News reported that the total investment value could reach US$25 billion, including leverage. Google and Blackstone did not immediately respond to requests for comment on the report.
Blackstone has named Benjamin Treynor Sloss, a long-time Google executive, as chief executive of the new venture.
TPUs shape the compute strategy
Google Cloud chief executive Thomas Kurian said the partnership would address demand for TPUs by giving organisations more ways to access computing capacity.
The business will operate in the same segment as neocloud providers, including CoreWeave and Nebius Group. These companies sell computing power to AI companies. Many use Nvidia graphics processing units, while the Google-Blackstone venture will run on Google’s TPUs.
CoreWeave, one of the neocloud providers in the AI infrastructure market, reported revenue backlog of US$66.8 billion as of December 31, 2025.
Alphabet’s latest results showed Google Cloud revenue rose 63% year over year to more than US$20 billion in the first quarter of 2026. Backlog for the cloud business nearly doubled quarter on quarter to more than US$460 billion. Alphabet also reported US$35.7 billion in capital expenditure for the same quarter.
Blackstone builds its data centre position
Blackstone has made several investments in AI-related infrastructure, including data centres, power generation, and transmission assets. Blackstone has also expanded its data centre holdings through acquisitions. It bought data centre operator QTS in 2021. In 2024, it acquired Australian data centre operator AirTrunk in a transaction with an implied enterprise value of more than A$24 billion.
At the time of the acquisition agreement, AirTrunk had more than 800 megawatts of capacity committed to customers across Asia Pacific.
Earlier in May, Blackstone held an initial public offering for Blackstone Digital Infrastructure Trust. The vehicle focuses on acquiring already-built and leased data centre properties. Reuters reported that it raised US$1.75 billion in its US IPO and was targeting data centres leased to hyperscale tenants.
Reuters also reported that Blackstone manages a US$150 billion global portfolio in digital infrastructure.
Data centres increase power requirements
Data centre operators are seeking long-term power arrangements to support large computing workloads.
The International Energy Agency projects global electricity consumption from data centres will double to around 945 terawatt-hours by 2030. The agency said this would represent just under 3% of global electricity consumption in 2030.
The IEA also said data centre electricity consumption is expected to grow by around 15% a year from 2024 to 2030. That rate is more than four times faster than electricity consumption growth from all other sectors.
Blackstone President Jon Gray said the partnership reflects demand for AI infrastructure and the need for large-scale capital deployment. Spending by Big Tech firms on AI infrastructure, including data centres, is expected to exceed US$700 billion in 2026.
(Photo by Aidan Bartos)
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