Google, Blackstone launch $5 billion AI cloud company to challenge Nvidia | Start Ups
Google and Blackstone have announced a new artificial intelligence (AI) cloud venture that will provide access to Google’s custom AI chips, known as Tensor Processing Units (TPUs), to outside customers.
Blackstone will initially invest $5 billion in the project, which aims to bring 500 megawatts of data centre capacity online by 2027, with plans to expand further over time.
In a joint media release, the companies said the new US-based firm will offer “compute-as-a-service”, allowing businesses to rent AI computing power using Google’s TPU chips instead of building their own expensive infrastructure.
What are TPUs?
TPUs are AI-focused chips developed by Google for training and running advanced AI models. They power several Google AI products, including Gemini, and are seen as an alternative to Nvidia’s GPUs, which currently dominate the AI chip market.
Google has previously offered TPUs mainly through Google Cloud, but the new venture will make them available through a separate AI cloud platform as well.
“The joint venture between Blackstone and Google is intended to give customers even more choice and flexibility for running their AI workloads on TPUs,” Blackstone said in a statement.
Why the deal matters
The partnership comes amid surging global demand for AI infrastructure as companies race to build and deploy generative AI tools.
The move is also seen as Google’s biggest push yet to commercially expand its TPU ecosystem and compete more aggressively with Nvidia-backed AI cloud firms such as CoreWeave.
Google executive Benjamin Treynor Sloss, who has worked on the company’s infrastructure operations for more than two decades, will lead the new venture as CEO.
Google is expected to capitalise on the deal and monetise its multi-billion dollar investments in AI compute infrastructure, building on the growth delivered by Google Cloud. Its parent company, Alphabet, recently increased its 2026 spending plans to between $180 billion and $190 billion, up from its earlier estimate of $175 billion to $185 billion.
Google has already signed massive deals with AI firms like Anthropic and Meta to give them access to its TPU chips, as it pushes to expand its presence in the fast-growing AI infrastructure market.
Blackstone is the world’s biggest alternative asset manager, with over $1.3 trillion in assets under management, and the largest global provider of data centers.
The company’s president Jon Gray said: “We see a generational opportunity to invest capital at scale building AI infrastructure. This new company has enormous potential as it helps to meet the unprecedented demand for compute.”
