Shares of CoreWeave and Nebius registered a roughly 4.5% decline on Tuesday morning following Blackstone’s public announcement of a joint venture with Google to form a new artificial intelligence cloud company built around Google’s Tensor Processing Units (TPUs).
The new company will be based in the United States and offer customers a bundled compute-as-a-service product that includes physical data center capacity, day-to-day operations, networking, and access to Google Cloud’s TPUs. The arrangement is intended to provide an additional route for organizations to access TPUs outside of direct purchases or deployments through Google Cloud itself. The venture is positioned as a direct competitor to current AI infrastructure providers, including CoreWeave.
Blackstone is providing an initial equity commitment of $5 billion from funds it manages to underpin the buildout. The firm expects the joint venture to bring the first 500 megawatts of capacity online in 2027, with intentions to scale capacity substantially after that initial phase.
Google will be responsible for supplying hardware, including TPUs, along with the necessary software and services to operate the platform. The announcement highlights that TPUs are custom-designed chips optimized for AI workloads, including both the training and inference phases of advanced models. The chips have been developed and used in production for over a decade, and the company said they power workloads for AI research labs, capital markets firms and other organizations running high-performance computing applications.
Benjamin Treynor Sloss, a long-time Google executive with more than 20 years of experience building and operating the company’s global infrastructure and operations, has been named chief executive officer of the new company.
Quoting executives involved in the transaction, Jon Gray, President and COO of Blackstone, said, "We see a generational opportunity to invest capital at scale building AI infrastructure." Thomas Kurian, CEO of Google Cloud, added that the joint venture helps meet growing demand for TPUs, which are optimized for efficiency and performance in the AI era.
The move expands Blackstone’s footprint in the data center sector. The firm manages in excess of $1.3 trillion of assets and is identified in the announcement as the largest global provider of data centers.
Implications for markets and operators
The proposed venture creates an alternative distribution channel for Google’s TPU technology and establishes a new, well-funded competitor in the market for AI compute. That prospect appears to have prompted immediate selling pressure in publicly traded AI infrastructure providers referenced in the announcement.
What remains limited or unclear in the announcement
- Specific commercial terms for customer contracts and pricing were not disclosed in the announcement.
- Detailed timelines for capacity beyond the initial 500 megawatts in 2027 were not specified, aside from a plan to scale materially thereafter.