CME Group and Google in billion dollar cloud computing company

Chicago’s CME Group futures market and Google on Thursday announced a deal to move financial trading technology to cloud computing systems, a deal backed by a $ 1 billion investment.

The 10-year partnership, which will be implemented in phases, includes Google’s commitment to purchase $ 1 billion of non-voting preferred shares in CME. The shares can be converted into ordinary shares of CME. CME’s current market value is around $ 80 billion.

Executives said CME will move its data and clearing services to Google Cloud starting next year and more market information will follow. CME and Google said the partnership will improve market access and speed up delivery of new trading algorithms and toolkits.

CME said the change would allow it to streamline operations and automate some functions. A spokesperson declined to discuss the possible impacts on the company’s jobs. CME is the world’s largest futures market and includes business from the Chicago Mercantile Exchange and the Chicago Board of Trade.

The partnership “will transform derivatives markets through technology, expanding access and creating efficiencies for all market players,” CME President Terry Duffy said in a press release. . “To ensure a smooth transition, we will work closely with customers to implement a phased approach. This partnership will allow CME Group to bring new products and services to market faster, all in a flexible and evolving environment that will create a wide range of opportunities for the market.

Executives said the deal would offer improved cybersecurity, a concern for all cloud computing, but especially when financial markets are involved. Further details on the partnership will be released later, they said.

Thomas Kurian, CEO of Google Cloud, said that “the deep engineering expertise of his operation will help accelerate technological innovation in capital markets infrastructure.” Google is part of the Alphabet holding company.

Duffy said he appointed Ken Vroman to the role of transformation director to lead CME’s efforts. Vroman was senior general manager in charge of international growth.

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