Google Invests $1 Bln In CME Group, Announces Cloud Computing Partnership

(RTTNews) - Alphabet Inc's (GOOGL) Google has invested a sum of $1 billion in future-exchange operator CME Group (CME) and also signed another agreement to move CME Group's trading systems to the cloud, the companies said in a joint statement.

As per the terms of the 10-year agreement, the Chicago-based CME Group will start shifting its technology infrastructure to Google Cloud next year and eventually, the Google Cloud unit will run the markets, which work with trillions of dollars in trading every day.

The deal will bring to CME new users at a faster rate, smoothen its pace of operations and develop new tools with help from the Google Cloud technology like AI software to monitor trading markets in a more smooth and convenient manner. The CME deal is an important one for Google's cloud business as it vies with companies like Amazon.com Inc (AMZN) and Microsoft Corp. (MSFT) to secure large contracts from Fortune 500 companies.

By inking the CME deal, Google Cloud has got itself an important client in this field. With a market capitalization of $79.2 billion, CME is the world's most valuable exchange operator, working on a wide variety of markets like crude oil to gold to stock-market futures.

The companies in their joint statement also said that along with the cloud deal, Google made a $1 billion equity investment in non-voting convertible preferred CME Group stock. This transaction is one the largest ones ever made by Google in the financial services sector. Commenting on the deal, Google Cloud Chief Executive Thomas Kurian called the investment "a reflection of our commitment to the transformation of the financial system, not just to one company's infrastructure." Once the deal is complete, the companies will focus on CME's data and clearing services, which are not so sensitive to speed as the core trading systems. Clearing is the process of settling transactions and transferring money between market participants after trades. Eventually, the deal works out to move all of CME's markets onto the cloud.