Investment firm to put $5 billion toward venture using Google’s chips

WSJ: By Lauren ThomasFollow

 and Cara LombardoFollow

Updated May 18, 2026 at 9:37 pm ET

A Google Cloud pavilion at a conference in Barcelona in March. Angel Garcia/Bloomberg News

Alphabet’s GOOGL -2.57% Google and Blackstone BX -1.32% plan to create an artificial-intelligence cloud company to rival the likes of CoreWeave CRWV-5.72% using Google’s specialized chips.

The duo said Monday they plan to launch the unnamed U.S. company with $5 billion in equity capital from Blackstone, confirming an earlier report by The Wall Street Journal.

The venture, the biggest attempt yet by Google to sell and monetize its own chips to external parties, will sharpen a rivalry with Nvidia, the market leader in AI computing. 

The new company aims in 2027 to bring 500 megawatts of capacity online—roughly the same amount of electric power required to serve a midsize city—and substantially increase capacity over time, Google and Blackstone said.

The companies are forming the venture as demand for computing power to train and run advanced AI models reaches unprecedented levels. Most of the major AI companies currently rely, at least in part, on computing infrastructure from CoreWeave, which uses Nvidia’s chips. A class of smaller so-called neocloud companies have also cropped up in response to ravenous demand. 

Google last month introduced a new processor that is customized for AI inference, or the computing required to run models rather than train them. Demand for that type of processing has exploded as businesses embrace AI. Google also introduced a new version of its chips that is specially designed for training models.

Google will supply hardware—including its specialized chips known as Tensor Processing Units, or TPUs—as well as software and services to the venture. Benjamin Treynor Sloss, a longtime Google executive, will serve as the new company’s CEO.

Blackstone will be the majority owner, people familiar with the matter said, and is expected to support around $25 billion in compute investments including leverage. Google and Blackstone have identified data centers that will likely be part of the venture, some of which are in the process of being built, the people said. 

Industry observers have wondered for years whether Google will commercialize its TPUs for widespread use. The technology giant has signed two major deals with outsiders: one to give Claude-maker Anthropic access to about one million of its chips, and another with Facebook owner Meta Platforms. 

News Corp, owner of The Wall Street Journal, has a commercial agreement to supply content on Google platforms.

Blackstone is one of Wall Street’s most active investors in AI and counts itself as the world’s largest provider of data centers. In 2021, it struck a deal to buy data-center operator QTS Realty Trust and in 2024 it agreed to buy data-center operator AirTrunk.

The firm has also made significant investments in CoreWeave, Anthropic and OpenAI, among other AI-related companies. 

Blackstone Chairman and Chief Executive Stephen Schwarzman, who has been active in the AI field for over a decade, said on a recent earnings call that the firm has more than $150 billion in data-center assets, including sites under construction, with an additional $160 billion in potential new projects.

Blackstone recently launched a new unit called Blackstone N1, or BXN1, to centralize the firm’s AI bets and named Jas Khaira, who spearheaded its CoreWeave investment, as the unit’s global head. The venture with Google is BXN1’s second investment after a $1.5 billion joint venture with Anthropic and other firms unveiled earlier this month to sell AI tools to companies.