Banks Extend $22B Loan to Blackstone, Alphabet for Crux AI Cloud Venture
Major Loan Deal Fuels New AI Cloud Business
Sept 16 (Reuters) - A group of 10 banks is providing a $22 billion chip loan to support Blackstone and Alphabet's new cloud venture Crux AI, Bloomberg News reported on Wednesday, citing people with knowledge of the matter.
Key Banks Involved
The banks include Goldman Sachs Group, Sumitomo Mitsui Banking Corp, Barclays, BNP Paribas SA and Bank of Nova Scotia, the report said.
Details of the Crux AI Venture
Announcement and Objectives
Google and Blackstone announced the venture in May, saying they would form a cloud business aimed at meeting growing demand for AI computing services.
Investment and Expansion Plans
Blackstone would invest an initial $5 billion in equity to help bring 500 megawatts of data center capacity online in 2027, with further expansion planned.
Industry Context
The venture comes as tech companies ramp up spending on data centers, power and specialized chips to support AI applications.
Loan Structure and Utilization
Purpose of the Debt
The debt will be used to purchase Google's custom Tensor Processing Units, and will be backed by the value of those chips and Crux AI's customer contracts, according to the report.
Responses from Stakeholders
Comments from Involved Parties
Blackstone, Alphabet, Goldman Sachs, BNP, Barclays, Bank of Nova Scotia, Sumitomo Mitsui Banking Corp did not immediately respond to Reuters requests for comment.
Reporting Credits
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur)