Tech giant Google and financial derivatives exchange operator CME Group plan to team up to build a cloud-computing network in the Chicago area to move options and futures trading into the cloud in the latest part of the industry shift from in-person, open-outcry trading pits.
The deal announced on Wednesday builds on a partnership formed in 2021 by Chicago-based CME Group and the Mountain View, California-based search engine provider that, at the time, made a $1 billion investment in CME.
The companies said development of the specialized platform is underway, with work to begin soon on a cloud-computing data storage facility set to begin this year near CME’s existing data center campus in Aurora, Illinois. That facility is about 35 miles west of Chicago’s Loop business district at 2905 Diehl Road.
They said the goal is to create a cloud-based, high-speed trading network for derivatives traders. Keeping the data in the Chicago area will let CME clients “utilize existing connectivity options and access points to other global markets,” according to a statement from the companies. They didn't specify the facility's size or the power capacity, and CME did not respond to a request for comment from CoStar News.
In recent decades, stock exchanges have been increasingly moving away from centralized trading floors, where deals are made in person. A group of Wall Street investors, such as BlackRock and Citadel Securities, is backing plans to launch a fully electronic, national stock exchange based in Texas with no physical trading floors.
CME and Google said the exchange operator’s clients will be able to choose between creating self-managed networks within the new facility or having Google manage data, with both options having equal latency — or time lag — to the exchange.
"This is a significant step forward in our partnership with Google Cloud that is revolutionizing our industry," CME Group Chairman and CEO Terry Duffy said in the statement. "Located within close proximity to our current data center campus, and with disaster recovery facilities in Dallas, Texas, Google Cloud's new specialized platform will extend the benefits we can provide to our clients through next-generation cloud technology, expanded access and efficiencies, a broader range of customized connectivity options, and faster product development, with minimal disruption to their current operations."
Clients will receive notice at least 18 months before markets move to the new platform, Google and CME Group said, while CME cash markets will continue operating from their current facilities. Customers can test the trading capabilities out of the Dallas Google Cloud region, an eventual disaster recovery facility, the companies said.
Companies that move to the cloud will have access to Google Cloud’s artificial intelligence and data capabilities, including a machine learning platform.
"Our latest milestone with CME Group builds on our shared goal to accelerate CME's move to the cloud and innovate capital markets infrastructure worldwide," Thomas Kurian, CEO of Google Cloud, said in the statement.