Google Agrees to Create AI Cloud Firm With Blackstone

Summary

Neil Campling discusses the Google-Blackstone AI cloud JV, noting it represents less than 1% of the massive 100GW data center capacity announced this year, but warns that 60% of such announcements face delays. He also analyzes the legal ruling clearing the way for OpenAI's likely Q3 IPO and the valuation challenges for SpaceX's upcoming IPO.

• Google and Blackstone form an AI cloud JV with $5 billion in equity capital, targeting 500MW capacity by next year.
• Over 100GW of data center capacity has been announced this year, equivalent to Germany's entire power grid.
• 60% of data center announcements are expected to be delayed due to regulatory, capacity, memory, or funding issues.
• The legal verdict against Elon Musk's OpenAI lawsuit removes a major overhang, clearing a path for an OpenAI IPO.
• Timing for an OpenAI IPO is likely Q3 of this year, following the SpaceX IPO.
• SpaceX's IPO valuation is uncertain due to the combination with Starlink and broader AI pricing questions.
• The AI infrastructure buildout is massive but faces significant execution risks.