Dive Brief:
- As artificial intelligence adoption continues to proliferate, Google and private equity firm Blackstone announced a joint venture Monday that will create a new AI-focused company offering data center capacity and more through a compute-as-a-service offering.
- Blackstone is making an initial $5 billion equity capital investment for the new company, and Google Chief Program Officer Benjamin Treynor Sloss was named CEO of the new company.
- The new venture expects to bring 500 megawatts of data center capacity online by 2027, and the companies have plans to scale further over time, according to the release. The announcement comes as the United States Energy Information Administration projects that commercial energy use will surpass residential use in 2027 for the first time on record.
Dive Insight:
The National Electrical Manufacturers Association expects U.S. electricity consumption to increase 55% by 2050, with the “steepest concentration of growth” in this decade. Data center electricity consumption is projected to grow 300% in the next 10 years and is projected to account for “38% of net electricity consumption through 2037,” according to NEMA’s report.
Google Cloud CEO Thomas Kurian said in the release that the joint venture will help meet a “growing demand” for tensor processing units, Google’s custom-made processing units built for AI tasks and workloads. Under the agreement, Google will provide its TPUs — which power Google Gemini and other AI-backed products — and other hardware for the new company, as well as software and services.
“We see a generational opportunity to invest capital at scale building AI infrastructure,” Blackstone President and Chief Operating Officer Jon Gray said in the release. “This new company has enormous potential as it helps to meet the unprecedented demand for compute [capacity].”
The companies said the venture is also designed to give AI customers another option for where to run their workloads and access Google’s TPUs outside of Google Cloud. Sloss — who will lead the new company — has been a Google executive for over two decades, most recently as the company’s programs officer, a role he took on after serving as a vice president of engineering, according to his LinkedIn profile.
Sloss has been responsible for site reliability engineering — a term he’s credited with coining — since 2003, and has overseen global networking since 2004 and global data centers servers operations since 2010, according to LinkedIn. He’s also been responsible for Google Cloud since 2014, reliability infrastructure since 2019 and supply chain and supply/demand planning since 2024.
Blackstone recently folded its growth-focused business into a West Coast division of the company that will focus entirely on the firm’s AI portfolio called Blackstone N1. Blackstone’s AI portfolio includes OpenAI and Anthropic PBC, in addition to companies focused on data center hardware, electricity and AI-powered enterprise software and services.
