Crux AI lines up $22 billion chip loan as 2027 capacity target looms

A group of 10 banks is providing a $22 billion loan to Crux AI, the cloud venture formed by Blackstone and Alphabet, to buy Google-made tensor processing units, Bloomberg reported on September 16, citing people with knowledge of the matter. The debt is secured against the value of the chips themselves and against Crux AI's customer contracts. A subset of the banks is also extending a separate $1 billion revolving credit line.

That is more than four times the $5 billion of initial equity Blackstone committed when the venture was announced in May. Goldman Sachs, Sumitomo Mitsui Banking Corp., Barclays, BNP Paribas and Bank of Nova Scotia are among the lenders, a source told Reuters. The banks are syndicating part of the exposure to additional institutions, and the facility could later be replaced with longer-term money from investment-grade bond investors, according to the Bloomberg account.

The financing lands against a hard buildout promise. Crux AI, which operated internally under the code name Project Braid before formally launching in September, is targeting 500 megawatts of operating capacity in 2027, and says on its platform overview that it expects a capacity ramp of 2 gigawatts a year starting in the second half of that year. Bloomberg reported last week that the project has already run into delays at major data center locations meant to run Google's chips.

The hiring tells you where the venture thinks its risk sits. Crux AI brought in Alan Duong, who spent more than 12 years at Meta and most recently ran its data center engineering and construction organization, as chief development officer, responsible for end-to-end delivery of multiple gigawatts, Data Center Dynamics reported. He works under chief executive Benjamin Treynor Sloss, a longtime Google infrastructure executive.

In September, Charter Communications confirmed in an SEC filing that finance chief Jessica Fischer was resigning effective October 15; a Blackstone spokesperson confirmed to Fortune's CFO Daily that she becomes CFO of the venture. Fischer had been at Charter since 2017 and CFO since 2021. Charter, No. 85 on the Fortune 500, named chief accounting officer Kevin Howard interim CFO and began a search.

Two senior people, one who builds hyperscale campuses and one who has run the balance sheet of a capital-heavy public company, is a reasonable read on what a compute platform with $5 billion of announced equity and a reported $22 billion debt package believes it is short of. Neither Blackstone nor Google has disclosed where the facilities will sit or how the platform will source power, according to Data Center Knowledge, and those two decisions determine which regional labor markets absorb the construction work.

The financing structure is less novel than the number suggests. Blackstone led CoreWeave's $2.3 billion GPU-backed facility in 2023 and a $7.5 billion facility in 2024, and was anchor investor in an $8.5 billion delayed-draw term loan this year that CoreWeave described as the first investment-grade rated GPU-backed financing, carrying an A3/A(low) rating with MUFG and Morgan Stanley as bookrunners. The difference at Crux AI is which side of the table Blackstone occupies: lender in those deals, equity sponsor in this one.

The pipeline behind it is larger still. A lender group including Apollo Global Management and Blackstone arranged a $35 billion financing that lets Anthropic lease TPUs, in a deal supported by Broadcom, which helps Google manufacture the chips. A second transaction on the same template is under discussion with more than $60 billion on the table, Bloomberg reported. And Nvidia last month announced a $500 billion arrangement involving six large financial institutions, Blackstone among them, to help customers finance purchases of its processors.

What that capital buys is accelerators and the contracts to run them. Crux AI intends to sell dedicated capacity to AI labs, technology companies, enterprises and governments, competing with neocloud operators including CoreWeave and Nebius, and it has said the platform combines power, purpose-built data centers, networking, accelerated computing, software and operations. Every one of those layers past the chip requires sites, interconnection and crews.

Blackstone shares have lost about 21% year to date; Alphabet is up about 10%.