Dive Brief:
- Blackstone and Google launched a new joint venture to provide data center capacity and Google Cloud’s Tensor Processing Units under a compute-as-a-service offering, the two companies said Monday. Benjamin Treynor Sloss, who has spent the last 22 years as an engineering executive at Google, will lead the venture as CEO.
- The cloud offering aims to give customers greater flexibility for running AI workloads on TPUs, according to the announcement. Blackstone will make an initial commitment of $5 billion in equity capital and expects the first 500 megawatts of capacity to come online in 2027. Google will supply the hardware, including TPUs, software, services and technical expertise.
- “This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era,” Thomas Kurian, CEO of Google Cloud, said in the announcement. “Together, we’re accelerating AI transformation and providing more options for organizations to access accelerated compute capability.”
Dive Insight:
Google and Blackstone’s joint venture comes as enterprise spending on cloud infrastructure services reaches historic levels.
Enterprises spent $129 billion on cloud infrastructure services in the first quarter of 2026, a $35 billion year-over-year increase, according to data from Synergy Research Group. Cloud infrastructure services spending has grown for nine successive quarters as generative AI in particular fosters significant changes in the cloud market.
The TPU cloud company is taking a page from neocloud providers, offering compute-as-a-service as the companies bid for enterprise spend on compute power. Neocloud providers, which include GPU-as-a-service offerings, have in recent years stepped in to fill a supply gap as agentic and generative AI has accelerated enterprise demand for compute.
Though AWS, Microsoft and Google maintain the largest cloud market shares, neocloud providers — including companies like Nebius, CoreWeave and Akamai — are gaining ground in the overall cloud market.
Five neocloud providers are among the top 30 cloud providers based on cloud infrastructure service revenues, and neocloud revenues are anticipated to reach $400 billion by 2031, according to a separate Synergy Research Group report.
“The competitive landscape is evolving, with neoclouds playing an increasingly significant role — already accounting for 5% of the total cloud market and a substantially larger share of AI-focused segments,” John Dinsdale, chief analyst at Synergy Research Group, said in a press release.
Prior to the joint venture, Google had already been making moves to expand access to its TPUs and add connections to neoclouds.
Last month, Google and Broadcom signed an agreement with Anthropic to add multiple gigawatts of TPU capacity starting in 2027. In April, Google also partnered with CoreWeave, which launched CoreWeave Interconnect to link the AI cloud provider to Google Cloud and allow cross-cloud training and inference.
In addition to the infrastructure play, the tech giant is also supporting enterprise AI adoption through a search for forward-deployed engineering talent.
