Google Partners with Blackstone for New Cloud Computing Venture
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- TPU Delivery Initiative: During the Q1 earnings call, Google announced plans to deliver custom AI accelerator chips, Tensor Processing Units (TPUs), to select customers, having already signed a deal with Anthropic and a tentative agreement with Meta, indicating Google's intent to expand in the AI hardware market.
- Joint Venture Formation: Google is partnering with Blackstone to establish a new neocloud compute-as-a-service company, with Blackstone providing $5 billion in capital and Google supplying TPUs and software, enhancing Google's competitive edge in the cloud computing market, particularly against Nvidia.
- Market Competition Threat: The new joint venture plans to deploy 500 megawatts of TPU capacity by next year and scale rapidly, posing a significant threat to CoreWeave and Nebius, especially in terms of pricing, which could impact their market share and profitability.
- Economies of Scale: Google aims to grow demand for its TPUs to achieve greater economies of scale, allowing it to secure priority with its manufacturing partner, Taiwan Semiconductor, thereby accelerating business growth and creating a virtuous cycle, which poses a potential threat to Nvidia.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to fall
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 384.840
Low
255.00
Averages
336.08
High
400.00
Current: 384.840
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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