Blackstone and Google have announced a joint venture that will spend billions of dollars to create a new U.S.-based company to offer efficient data center capacity, operations and networking. The company will use Google Cloud's Tensor Processing Units (TPUs) as a compute-as-a-service offering, allowing companies to rent specialized computing power.
Pushing the TPUs is a way of challenging Nvidia devices, which have become a standard in the industry. Some market watchers have noted that the AI race could become similar to the infamous gold rush, where the real wealth might lie in the tools and supplies needed to succeed.
Google will also supply software and services to the still-unnamed joint venture. The JV also provides a new challenge to Amazon. Former Google executive Benjamin Treynor Sloss, who has 20 years of experience working in the tech giant's global infrastructure and operations, will be the new venture's CEO.
The move is an attempt to create a new AI service delivery mechanism for training and inference of advanced AI models. Blackstone is scheduled to make an initial $5 billion equity commitment for a 500 megawatt capacity online in 2027, with existing plans to scale "significantly over time," according to a Blackstone release.
The project could eventually be worth $25 billion, Bloomberg reported. Google has been expanding its AI chip line and seeking new ways to incorporate its use.
The new business will also compete with "neoclouds," like CoreWeave and Nebius Group NV, which provide computing power to AI service providers.
"We see a generational opportunity to invest capital at scale building AI infrastructure," said Blackstone president and COO Jon Gray in prepared remarks.
"This new company has enormous potential as it helps to meet the unprecedented demand for compute. This partnership combines Google's advanced AI compute technology with Blackstone's expertise in digital infrastructure to help meet surging global demand for advanced AI workloads," Google added in comments.
The announcement came shortly after Blackstone Digital Infrastructure Trust made its public debut, after pricing its up to $2 billion IPO. The REIT plans to invest the net proceeds into "newly-constructed, income-generating, stabilized data center assets in accordance with the Company's investment strategy." Additionally, the new company will target newly constructed data center acquisitions in the $250 million to $1.5 billion value range.
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