Google makes $1 billion equity investment in derivatives marketplace CME Group

Google Cloud has made a $1 billion equity investment in US-based derivatives marketplace CME Group as the companies enter into a 10-year partnership to transform derivatives markets through technology.

CME Group and Google Cloud have announced a 10-year strategic partnership to accelerate CME Group’s move to the cloud and transform how global derivatives markets operate with technology. “Through this long-term partnership with Google Cloud, CME Group will transform derivatives markets through technology, expanding access and creating efficiencies for all market participants,” said Terry Duffy, Chairman and Chief Executive Officer, CME Group.

“To ensure a smooth transition, we will work closely with clients to implement a phased approach. This partnership will enable CME Group to bring new products and services to market faster – all in a flexible and scalable environment that will create a wide range of opportunities for the marketplace,” said Duffy.

“CME Group has a century-long track record of helping investors access new markets and is known for innovation in financial markets,” said Thomas Kurian, CEO, Google Cloud. “Bringing together CME Group's best-in-class financial talent with Google Cloud’s deep engineering expertise will help accelerate technological innovation in capital markets infrastructure,” added Kurian.

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Under the agreement, CME Group will migrate its technology infrastructure to Google Cloud beginning next year with data and clearing services. It will then eventually move all of its markets to the cloud.

CME Group will leverage Google Cloud's global network to scale its infrastructure, while increasing access for more market participants, optimising costs, and helping onboard new users more easily and quickly, it said in an official release.

It will also create real-time data and analytics capabilities and introduce new products and services. “The two companies will also continue to explore ways to work together on go-to-market initiatives that deliver new innovations for CME Group's customers,” it said

CME Group is planning to increase efficiencies by moving to the cloud and streamlining operations, optimising its IT infrastructure, and automating non-trading operations. “As CME Group's trusted cloud provider, Google Cloud will deliver open source technology standards and enhanced cybersecurity protection, underpinned by a global network,” it further said.

To help facilitate the cloud migration for CME Group, Ken Vroman has been appointed to a new role as Chief Transformation Officer.

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