Wall Street’s latest AI tie-up between financial capital and tech powerhouses further proves Warren Buffett’s outstanding investment insight. As reported by The Wall Street Journal, Google parent Alphabet (GOOG, GOOGL) and global top alternative asset manager Blackstone (BX) have launched a joint AI venture, with Blackstone injecting $5 billion in initial equity capital.
Shortly before stepping down as Berkshire Hathaway CEO, Buffett bought Alphabet shares within his final year in charge, and the investment has now nearly doubled in market value.
The collaboration marks a key move for Wall Street to deepen layout in global AI infrastructure. Blackstone President and COO Jon Gray noted the new venture holds huge potential to satisfy soaring global computing demand.
The joint venture integrates strengths from both sides: it supplies Google Cloud self-developed TPU computing resources, and leverages Blackstone’s abundant data center assets and mature operational capabilities. Blackstone owns over $150 billion worth of global data center assets, while Alphabet keeps expanding its infrastructure scale steadily.
The two sides aim to launch 500 megawatts of computing capacity by 2027, equivalent to the power consumption of a medium-sized city. Booming generative AI applications have sent computing and data center demand soaring, making AI physical assets a hot investment track worldwide.
Buffett no longer heads Berkshire Hathaway, yet he sealed several notable investment deals in his last tenure, including buying Alphabet stocks in Q3 2025.
Without exact public buying dates, market participants estimate Alphabet has rallied roughly 97% since mid-August that year. All entry points in that quarter have yielded solid returns.
This investment fully fits Buffett’s long-held strategy: purchasing high-quality firms with solid competitive edges at reasonable prices and holding shares long-term. Though Alphabet has reaped rich returns since its 2004 IPO, Buffett’s team remains optimistic about its long-term growth outlook.
Alphabet’s strong business fundamentals fully back its upward trend. Its latest earnings showed quarterly revenue growth climbed from 18% to 22%, mainly driven by Google Cloud business.
Google Cloud posted $20 billion quarterly revenue, jumping 63% year-on-year, far exceeding its 48% growth in the prior quarter. Its cloud order backlog hit $460 billion, nearly doubling quarter-on-quarter. Given its annual cloud revenue stays below $100 billion, the massive order reserve ensures steady business growth for at least two years ahead.
Supported by stable revenue prospects, Alphabet plans to spend $180 billion to $190 billion on capital expenditure this year, with spending set to rise sharply in 2027. Unlike peers facing market pressure over heavy AI spending, Alphabet’s sound earnings growth and sufficient order volume justify its large-scale investment.
Despite steep stock gains, Alphabet boasts rational valuation. Its forward price-earnings ratio stands at 28.2, higher than the 21.4 industry average in communication services, yet reasonable when factoring in its solid financial performance, brand advantages and solid business moat.
Beyond core search and cloud businesses, Alphabet also sees bright prospects in streaming and autonomous driving sectors. The new AI joint venture will further consolidate its edge in AI infrastructure development.
From Buffett’s early layout to Blackstone’s heavy capital support, Alphabet’s AI growth story is still in the early stage. Backed by top-tier investor recognition and strong internal fundamentals, Alphabet remains a worthy long-term investment choice even after its sharp rally.
