Alphabet shares moved higher after Crux AI, the cloud venture backed by Alphabet and Blackstone, secured $22 billion in debt financing from a group of 10 banks to purchase Google Tensor Processing Units, or TPUs. The loan is backed by the value of the chips and by customer contracts that Crux AI has in place.
Blackstone has committed an initial $5 billion in equity, while Google is contributing its custom TPUs, software, and services. The financing was first reported by Bloomberg News on September 16. Lenders include Goldman Sachs, Sumitomo Mitsui Banking Corp, Barclays, BNP Paribas, and Bank of Nova Scotia. The group is also working to bring in additional lenders through syndication, and the debt could later be replaced with long-term investment-grade bonds.
Crux AI formally launched last week and plans to bring its first 500 megawatts of data center capacity online in 2027. For Alphabet, the venture places its TPUs at the center of an externally financed AI cloud platform, broadening their use beyond Google's own internal operations.
GOOGL closed the prior session at $342.87, down 0.61%, and was up about 1% in premarket trading following the news. Analysts have also become more bullish. Evercore ISI analyst Mark Mahaney raised his Alphabet price target to $450 from $420, saying Google's search position has strengthened and Gemini is narrowing the gap with ChatGPT. Tigress Financial Partners raised its target to $485 from $415, citing AI-led growth across Search, Cloud, and YouTube.
Mahaney noted that 78% of survey respondents selected Google as their primary search engine, while ChatGPT's share has plateaued at around 10%. The gap between ChatGPT and Google Gemini fell to three percentage points, a record low. About 60% of respondents said they search more since adopting AI, challenging concerns that AI tools would weaken Google's search business. The development is primarily an equity and AI infrastructure event, with limited direct crypto market impact.
