Simpson Thacher & Bartlett is advising Blackstone-backed funds on a joint venture with Google to launch a new AI cloud company, with Blackstone making an initial commitment of $5bn, as demand for data centre capacity continues to surge.
The new US-based company will offer data centre infrastructure, networking services, and access to Google’s specialised AI Tensor Processing Units (TPUs), currently being used by AI labs, capital market firms and companies for training and running advanced computing models, as well as powering Gemini and Google’s own AI products.
For Blackstone, Simpson Thacher fielded a team led by New York M&A partners Anthony Vernace and Michael Chao, alongside Houston-based partner Katy Lukaszewski, all members of the firm’s digital infrastructure group.
Partners Jonathan Goldstein and Sophie Staples advised on tax aspects, while executive compensation and employee benefits matters were led by practice head Gregory Grogan. New York partners Jamie Talbot and Jonathan Ozner advised on IP and privacy aspects and capital market finance-related matters respectively. Energy and infrastructure aspects were handled by Brian Chisling and Javad Asghari. All partners are based in New York except Asghari, who splits his time between New York and Los Angeles.
LB understands Latham & Watkins advised Google on the deal.
Blackstone is a longstanding client of Simpson Thacher, and the law firm has been played a central role in executing the fund’s AI-focused strategy, as the asset manager has positioned itself as a critical data centre infrastructure provider through enormous capital allocations across acquisitions and development.
Notable mandates include advising the fund, in a consortium with the Canada Pension Plan Investment Board, on the $16.1bn acquisition of Asian data centre operator Air Trunk in 2024. In 2021, the firm advised Blackstone on its $10bn acquisition of data centre solutions provider QTS. Vernace and Grogan advised on both deals, with Chao, Asghari, and Goldstein also on the 2024 team, and Ozner on the 2021 team.
Blackstone’s initial $5bn equity investment will help the company bring 500 MW of capacity online in 2027, with plans to build further scale. Google will supply hardware, including TPUs, as well as software and services to the new company.
Google senior executive Benjamin Treynor Sloss will lead the new company as CEO.
Jas Khaira, head of Blackstone fund N1 (BXN1), said: ‘Capital alone doesn’t build category-defining platforms – the right partner, the right structure, and the conviction to underwrite singular opportunities do. Google’s TPUs, a decade in the making and foundational to the AI economy, are exactly the kind of platform BXN1 was built to back.’
Thomas Kurian, CEO of Google Cloud, said: ‘This joint venture with Blackstone helps meet growing demand for TPUs, which are optimized specifically for efficiency and performance in the AI era. Together, we’re accelerating AI transformation and providing more options for organizations to access accelerated compute capability.’
