Blackstone & Google AI Cloud: CoreWeave, Nebius Shares Drop

Blackstone and Google have launched a major joint venture to build a new artificial intelligence cloud infrastructure company. This news caused shares of CoreWeave and Nebius to fall nearly 4.5% on Tuesday. The new U.S.-based venture will provide large-scale data center capacity and offer Google Cloud TPUs through a compute-as-a-service model. This gives businesses another way to access Google's advanced AI chips. Blackstone has committed an initial $5 billion in equity capital. They plan to bring the first 500 megawatts of AI data center capacity online by 2027. Google will supply the TPU hardware, along with software and cloud services. Benjamin Treynor Sloss, a Google executive, will be the CEO. Google Cloud CEO Thomas Kurian says this partnership will help meet the surging demand for TPUs as AI adoption grows. The bottom line is this new venture intensifies competition in the rapidly growing AI infrastructure market.