Google and investment giant Blackstone will join forces in a new joint venture focused on AI cloud infrastructure, which will be built on Google's dedicated TPU chips.
The goal is to offer customers dedicated access to AI computing power and compete with fast-growing players like CoreWeave in a market that is turning into one of the hottest segments of the entire technology sector.
Blackstone puts in 5 billion, total project worth 25 billion
Blackstone $BX will inject $5 billion of equity into a new US AI cloud venture, bringing the total value of the investment to roughly $25 billion through leverage. The investment firm will become the majority owner of the joint venture, while Google $GOOG will bring technology know-how, chips and cloud software. According to the Wall Street Journal and Bloomberg, the project is being created with the ambition to compete directly with specialist AI cloud providers such as CoreWeave in the ever-accelerating AI market.
The structure is clear: Alphabet (Google) will supply the technology and infrastructure, Blackstone will provide most of the funding, management and experience in building the physical assets. This is a typical example of combining the capital strength of an alternative asset manager with the technology platform of a global player.
TPU chips as the basis for a new AI cloud platform
Google TPUs - custom chips designed specifically for AI applications and optimized for training and inference of advanced models - will be the foundation of the offering. Google has been developing and deploying them for more than a decade and in production today, they power the workloads of many top AI labs, capital markets and enterprises with the most demanding high-performance computing applications. TPU is also behind the Gemini family of models and other AI products that Google delivers to billions of users.
The new company will offer TPUs as a service - compute-as-a-service - to customers, expanding the ways they can be accessed alongside "traditional" use through Google Cloud. According to an official statement from Blackstone, the joint venture is intended to increase choice and flexibility for clients looking to run AI workloads directly on TPU infrastructure.
500 MW of capacity by 2027 and further scaling
The joint venture expects to bring the first 500 megawatts of capacity online in 2027. That's a significant number by AI datacenter standards, and just the beginning - long-term plans call for significant scaling in the years ahead. Google will supply hardware, including TPUs, as well as software and services to enable the project to respond as quickly as possible to the growing demand for accelerated computing power.
To illustrate the market dynamics: CoreWeave grew its revenue 168% year-over-year to $66.8 billion in 2025, and in April 2026 announced an extension of its long-term agreement with Meta through 2032 worth approximately $21 billion (up from approximately $14.2 billion). This shows how quickly multi-year contracts for AI cloud capacity in the tens of billions of dollars are being concluded.
The neocloud market is heading towards hundreds of billions
Industry estimates suggest that the market for so-called neoclouds - dedicated cloud providers focused on AI and HPC - could reach approximately $400 billion by 2031, at a compound annual growth rate (CAGR) of around 58%. The segment in which CoreWeave operates today is defined by a structural imbalance: the demand for GPU/accelerated computing power for training, inferencing and fine-tuning AI models has grown faster than any single provider has been able to meet globally.
Hyperscalers Microsoft, Google, Amazon, and Meta combined spent over $400 billion on data centers in 2025, with projections for 2026 talking about an amount approaching $700 billion. This is an environment in which the emergence of new dedicated platforms is starting to make economic sense - and this is exactly where the joint venture between Google and Blackstone is headed.
According to third-party estimates, CoreWeave is now larger than the 15 largest neoclouds in North America and Europe combined, and its stock has gained roughly 78.7% this year thanks to strong demand for AI infrastructure. The new AI cloud company will be a direct rival in a segment that is still early in its growth cycle.
Blackstone continues to bet on datacenters and energy
Blackstone is the largest global alternative asset manager with over $1.3 trillion in assets under management. The firm has been aggressively focused on digital infrastructure in recent years - in July 2025, it announced investments of over $25 billion to build data centers and energy infrastructure in Pennsylvania, USA, with the goal of catalyzing approximately $60 billion in additional investments.
In total, Blackstone has already invested more than $25 billion in developing digital and energy infrastructure in the region to support the growing demand for dedicated AI infrastructure that traditional cloud services cannot meet in the short term. The new AI cloud joint-venture with Google is thus a logical extension of the strategy: to combine long-term capital and infrastructure expertise with a technology platform that sits at the heart of the current AI transformation.