Blackstone and Google Form $5 Billion AI Infrastructure Venture Powered by TPU Chips

Blackstone, the world’s largest private owner of data centers, announced Monday that it will invest $5 billion in equity capital to form a new artificial intelligence infrastructure company in partnership with Google. The New York-based asset management giant will hold a majority stake in the venture, according to sources cited by The Wall Street Journal, though Blackstone did not disclose the official ownership structure in its statement.

google will supply the U.S.-based venture with its custom-designed Tensor Processing Units (TPUs), chips purpose-built for AI computations. The initiative aims to bring an initial 500 megawatts of compute capacity online by 2027, with plans to scale significantly over time, Blackstone said. “This new company has enormous potential as it helps to meet the unprecedented demand for compute,” said Jon Gray, President and COO of Blackstone.

The yet-unnamed company will be led by Benjamin Treynor Sloss, who previously served as Google’s chief programs officer. A Google spokesperson deCLIned to comment on whether the tech giant would retain a direct leadership role. The Wall Street Journal reported that the Joint Venture has already identified likely data center locations, some of which are already under construction.

The deal highlights the intensifying rivalry between Google and NVIDIA in the AI hardware space. Google’s TPUs have long been positioned as the company’s answer to Nvidia’s dominant graphics processing units. While Google continues to use NVIDIA GPUs across its Cloud Infrastructure, the company has steadily worked to reduce its reliance on them by advancing its proprietary TPU Technology. Google manufACTured its first TPU in 2015, making it an early proponent of in-house AI Hardware development. Other tech giants, including Amazon Web Services, have similarly moved to develop their own Semiconductor chips.

Unlike GPUs, which handle a broad range of computing tasks, Google touts its TPUs as optimized for nARRower, more efficient processing of specific APPlications such as Agentic AI. Google runs its Gemini AI model on TPUs, with anthropic and Citadel SECurities among its growing TPU client base. Nvidia’s GPUs, first developed in 1999 for rendering graphics, surged in demand following the launch of OpenAI’s ChatGPT in 2022, propelling Nvidia to become the world’s most valuable company in 2024. Earlier this month, Google briefly surpassed Nvidia by market value, with analysts noting that Alphabet remains well positioned in AI thanks to its in-house development, extensive distribution network, and profitable cloud division.

Blackstone, which manages over $1.3 trillion in assets, has invested aggressively across the AI ecosystem and established a similar venture with Anthropic earlier this month. Shares of both Alphabet and Blackstone rose approximately 1% in pre-market trading on Tuesday.