Google Cloud Invests $1 Billion in CME Group to Tune Finance-Backing Tech

CME Group will transform all of its services and processes on Google Cloud servers.

By Radhika Parashar | Updated: 5 November 2021 14:10 IST

Google Cloud Invests $1 Billion in CME Group to Tune Finance-Backing Tech

Google Cloud CEO said this deal will accelerate tech innovation in capital markets

Highlights

Google Cloud has entered into a partnership with CME Group
Google will invest $1 billion (roughly Rs. 7,434.9 crore) into the deal
The deal is locked for ten years

Google Cloud has announced a mega investment of $1 billion (roughly Rs. 7,434.9 crore) into US-based derivatives marketplace CME Group as the two companies enter into a new 10-year deal. The financial services provider will take its processes on to Google Cloud servers. The two firms are planning on developing risk mitigation tools and other user-benefitting platforms for people entering the space of “derivatives”, which are financial instruments instead of assets.

Noting that the deal would lead to cost saving, Terry Duffy, the Chairman and CEO of the CME Group then added, “it's the expansion and growth of the business,” while speaking to a news reporter about the Google partnership.

The multi-billionaire businessman firmly believes that every revenue stream needs to be backed up with technology.

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“Sometimes those technology inputs could take years to implement. So this is another way for us to capture revenues on a real-time basis, getting under the Google umbrella, which is so large and vast,” Duffy added.

The CME CEO said the pandemic got him thinking what would the world look like in the next five years and so he reached out to Google to up the company's tech game.

Meanwhile, Google Cloud has also acknowledged the new partnership on Twitter.

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Today, we announced a 10-year strategic partnership with @CMEGroup to increase market access, create efficiencies for clients, and build new products and services for the financial services industry. Read more here ↓ https://t.co/IVW9cajSsn
— Google Cloud (@googlecloud) November 4, 2021

The CME group has recently been putting focus on offering crypto-focussed financial services. The company has been expanding its crypto offerings with micro Bitcoin and Ether futures as demand for the second-largest digital asset by market valuation continues to rise.

Micro Bitcoin futures, for instance, launched in May and have since traded more than 2.7 million contracts, MSN news had reported quoting the CME Group.

Google's equity investment of $1 billion will be in a new series of non-voting convertible preferred stock of the CME Group.

"CME Group has a century-long track record of helping investors access new markets and is known for innovation in financial markets," Thomas Kurian, CEO, Google Cloud said while commenting on the deal, as per a report by the Wall Street Journal. He added that this deal will, “accelerate technological innovation in capital markets infrastructure”.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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Further reading: Google, Google Cloud, CME Group, Bitcoin, Ether, Fintech

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More