Alphabet (GOOGL) Stock: Google and Blackstone Launch AI Cloud Venture to Challenge Nvidia

TLDR

• Google and Blackstone are forming a new U.S.-based AI cloud company offering data center capacity and Google’s TPU chips as a compute-as-a-service product.
• Blackstone is committing an initial $5 billion in equity, with total investment potentially reaching $25 billion including leverage.
• The venture aims to bring 500 megawatts of data center capacity online by 2027.
• Google executive Benjamin Sloss has been named CEO of the new company.
• The deal puts pressure on neocloud providers CoreWeave and Nebius, both of which fell sharply in premarket trading.

Google and Blackstone are teaming up to launch a new AI cloud company, putting competitive pressure on neocloud players that have ridden the AI boom.

The venture will offer data center capacity alongside Google’s Tensor Processing Unit (TPU) chips through a compute-as-a-service model. It’s a direct challenge to providers like CoreWeave and Nebius, which have largely built their businesses on Nvidia hardware.

Alphabet stock was up around 0.4% in premarket trading on Monday. The stock is sitting roughly 4% below the $5 trillion market cap milestone, trailing only Nvidia’s $5.3 trillion.

Alphabet Inc., GOOGL

Blackstone is putting up $5 billion in initial equity. According to Bloomberg, the total investment value could reach $25 billion when leverage is included — though neither company confirmed that figure directly.

The first 500 megawatts of data center capacity are expected to come online in 2027. Blackstone said it plans to “scale over time” from there.

Benjamin Sloss, a long-time Google executive, has been appointed CEO of the new venture by Blackstone.

Thomas Kurian, CEO of Google Cloud, said the deal would help meet growing demand for TPU access by giving organizations more ways to tap into computing capacity.

Neoclouds Feel the Pressure

CoreWeave fell 4.7% and Nebius dropped 4.8% in premarket trading after the announcement. Both companies have benefited from AI-driven demand for cloud computing, but they rely heavily on Nvidia chips rather than Google’s in-house TPUs.

Nvidia itself slipped around 0.9% in premarket trading. Blackstone rose about 0.7%.

Nvidia has invested in both CoreWeave and Nebius — meaning the new Google-Blackstone venture is not just competing for customers, it’s pushing an alternative chip ecosystem.

Blackstone Doubles Down on AI Infrastructure

This deal is part of a broader push by Blackstone into AI-related infrastructure. The firm has been expanding its investments in data centers, power generation, and energy transmission assets.

Blackstone President Jon Gray said the partnership reflects rising demand for AI infrastructure and the need for large-scale capital deployment.

Big Tech spending on AI infrastructure is expected to top $700 billion in 2026, according to analyst estimates. Google is already seen as gaining ground in that race, supported by its custom chips and business tools that have attracted customers including Anthropic.

Google Cloud CEO Kurian has positioned TPUs as a key differentiator — and this venture gives that chip strategy a major new distribution channel.

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