Google and Blackstone decide to create a competitor to Nebius - billions will be invested in it

Google and investment giant Blackstone have agreed on a multi-billion dollar joint venture (JV) in artificial intelligence and cloud computing. The new company will compete directly with Arkady Volozh's Nebius Group, CoreWeave and other specialized providers of computing power for AI services.

Blackstone will take a controlling stake in the joint venture for $5 billion, and Google will provide the project with its tensor processing units (TPUs) designed specifically for neural networks and software, the investment company said. The partners plan to launch 500 megawatts of data centers by 2027. This is comparable to the power consumption of an average city, states The Wall Street Journal (WSJ). In the future, the project will be scaled up: according to a Bloomberg source, including debt financing, the investment volume will reach $25 billion.

The deal answers the industry's longstanding question about whether Google will bring its AI chips to the broad commercial market. Until recently, the tech giant has only used them for its own needs, aside from a handful of exclusive agreements - with Anthropic and Meta Platforms. The emergence of a new player with Google's hardware challenges market leader Nvidia, whose chips power the data centers of competing operators such as Nebius and CoreWeave, Bloomberg points out.

Blackstone is one of Wall Street's most active investors in AI. The company is aggressively building a presence in the industry: it has previously acquired data center operators QTS and AirTrunk, as well as invested in CoreWeave, OpenAI and Anthropic, WSJ recalls. To finance such acquisitions, Blackstone is raising funds on the open market: this month, the firm held an IPO of its trust, which will buy data centers to capitalize on the AI boom.

This article was AI-translated and verified by a human editor