Blackstone, the world’s largest alternative asset manager, will invest an initial US$5 billion in equity to help bring 500 megawatts of data centre capacity online in 2027, with further expansion planned over time.

The US-based venture will provide data centre capacity along with Google’s custom AI chips, known as Tensor Processing Units, or TPUs, through a compute-as-a-service model.

The total investment value could reach US$25 billion, including leverage, according to Bloomberg News.

Both companies did not immediately respond to a request for comments on the Bloomberg report.

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

Thomas Kurian, chief executive of Google Cloud, said the venture would help address growing demand for TPUs by offering organisations additional ways to access computing capacity.

Analysts and investors have said Google is taking a sizeable share of new AI-driven computing demand, supported by its business tools and custom chips that have attracted customers such as Anthropic.

“This isn’t the biggest headline number we’ve seen. But it’s a high-quality bet on sustainable growth in AI infrastructure,” said Brittain Ladd, AI and supply chain consultant at Florida-based Chang Robotics.

Blackstone ramps up AI investments

Blackstone has stepped up investments in AI-related infrastructure, including data centres, power generation and transmission assets.

Those investments are valuable as the AI boom pushes operators to secure long-term energy supply deals.

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

Spending by Big Tech firms on AI infrastructure, including data centres, is expected to top US$700 billion in 2026.