Google and data center management giant Blackstone are creating a new AI cloud company that will sell Google Cloud TPUs and compute capacity. CRN breaks down Blackstone’s $5 billion investment, the sales strategy, who will lead the new company and more.
Google is creating a new U.S.-based AI cloud company with data center provider giant Blackstone in a monumental move to provide Google Cloud Tensor Processing Units (TPUs) as a Compute-as-a-Service offering along with data center capacity.
“This new company has enormous potential as it helps to meet the unprecedented demand for compute,” said Jon Gray, president and COO of Blackstone, in a statement.
From who the leader of this new company will be to boosting Google’s hardware competition with Nvidia to Blackstone’s recently announced new AI services company with Anthropic, there’s a ton to unpack in Google’s new venture with the data center investor.
CRN breaks down the five biggest things Google Cloud customers and partners need to know about Google and Blackstone’s new company.
[Related: Google Cloud Vs. AWS Vs. Microsoft Azure Q1 Earnings Face-Off]
Blackstone’s $5 Billion Investment In Google
New York-based Blackstone will make an initial $5 billion investment in Google to bring 500 MW of cloud capacity online by 2027.
Blackstone plans to scale data center capacity significantly over time.
“We see a generational opportunity to invest capital at scale building AI infrastructure,” Gray said.
The Takeaway: Blackstone has $1.3 trillion in assets under management. With this new Google joint venture and war chest of money, it plans to become a major infrastructure and Compute-as-a-Service player in the AI era.
Longtime Google Executive To Lead New Company
Google and Blackstone have yet to name the new company.
However, it has selected a leader for the new company in Google Chief Program Officer Benjamin Treynor Sloss.
Sloss has been with Google for over 22 years, most recently leading a team of 14,000 engineers as the company’s head program officer.
He joined Google in 2003 and began climbing the ranks over the next two decades, including vice president of engineering. He’s been responsible for global networking, Google server operations and global data centers, to name a few, over his long tenure.
The Takeaway: Sloss is a highly experienced Google leader who knows the company inside and out, including data center designing, planning, construction and engineering. It appears he may be the right match to lead the new company.
What Will This New Company Do?
The new company led by Sloss will provide data center capacity, operations, networking and Google Cloud’s TPUs as Compute as a Service.
The new business will offer access to Google’s TPUs in a model similar to other cloud providers that offer AI infrastructure, such as CoreWeave.
In addition to supplying hardware, Google will provide software and services to the new company.
The new venture will also provide customers with an additional way to access cloud TPUs beyond Google Cloud.
“We are incredibly proud to partner with Google—bringing together their world-class TPUs and AI capabilities with Blackstone’s exceptional strength in energy and digital infrastructure,” Gray said.
The Takeaway: Google’s TPUs are an alternative to industry leader’s Nvidia’s GPUs. The new company aims to offer customers of all shapes and sizes an alternative to Nvidia.
Blackstone Created Similar AI Company With Anthropic
It is key to know that just this month, Blackstone said it will form a new AI services company alongside Anthropic.
Anthropic and Blackstone—along with investment giants Hellman & Friedman and Goldman Sachs—are creating an AI services company that will work with midsize companies across sectors to bring Claude into their most important operations.
Applied AI engineers from Anthropic will work alongside the firm’s engineering team to identify where Claude can have the most impact, build custom solutions and support customers over the long term.
The Takeaway: It is interesting to see how committed Blackstone is in forming not just strategic partnerships or deals, but full-blown new companies with AI leaders like Google and Anthropic.
Google Cloud CEO Weighs In; Google’s TPUs
Google Cloud is the world’s third largest cloud computing provider with its flagship Google Cloud Platform.
Key to Google Cloud’s success over the past decade has been CEO Thomas Kurian, who led the company’s infrastructure charge around TPUs.
“This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era,” Kurian said.
Google uses Nvidia GPUs for some of its cloud infrastructure but is seeking to reduce its reliance by continuing to build its own TPUs. Google’s TPUs are custom chips purpose-built for AI and optimized for training and inference of advanced AI models.
Google’s TPUs also power its most popular AI products and tools, including Gemini and Google Workspace, which it delivers to billions of users globally.
The Takeaway: Kurian is taking its TPU strategy to the next level with the new Google-Blackstone company seeking to drive Google’s TPU sales. In addition, Google TPUs will be seen as an alternative to Nvidia’s GPUs. “Together, we’re accelerating AI transformation and providing more options for organizations to access accelerated compute capability,” Kurian said.
